Markets zoom after Donald Trump is relected president

Dow soared 1508, advancers over decliners at only a modest 3-2 & NAZ shot up 544.  The MLP index surged 6+ to 292 & the REIT index sank 8+ to the 418s on sharply higher yields.  Junk bond funds were mixed & Treasuries continued to see heavy selling which increased yields substantially.  Oil was off pennies in the 71s & gold tumbled 79 to 2669 on a strong $ (more on both below).

Dow Jones Industrials 

The race to control the House is undecided, though Reps are already expressing early optimism about securing a governing trifecta with their new Senate majority & freshly minted Pres-elect Donald Trump.  “As more results come in it is clear that, as we have predicted all along, Republicans are poised to have unified government in the White House, Senate and House,” Rep House Speaker Mike Johnson said.  That early confidence comes as Reps need to win 12 more seats to maintain their majority, while Dems need 37 more to flip control.  20 key House districts remain uncalled.  The others are so far unlikely to be flipped.  Among the remaining races are California's 47th Congressional District, Maine's 2nd & Alaska's at-large district, where Reps are looking to pick up seats, along with California's 45th, 1 of the most expensive races in the country.  “The path to take back the majority now runs through too close to call pick-up opportunities,” House Minority Leader Hakeem Jeffries said.  “The party that will hold the majority in the House of Representatives in January 2025 has yet to be determined. We must count every vote.”  House GOP members entered the 2024 contest with a historically slim majority, 220 GOP seats to Democrats’ 212 with 3 vacancies.

House majority still in play as Republicans eye a red sweep

Pres-elect Donald Trump's victory spurred a rise in the 10-year Treasury yield.  Mortgage rates, which loosely follow the benchmark yield, are also climbing.  The average rate on the 30-year fixed mortgage surged 9 basis points to 7.13%, according to Mortgage News Daily.  That is the highest rate since Jul 1 of this year, though not quite the surge some had expected.  “The expectation among bond traders coming into the election was that rates would move higher in the event of a Trump victory and especially a red sweep. While the latter is not yet clear, the former is enough for another bump to rates that have already risen abruptly with Trump’s victory odds,” said Matthew Graham, COO at Mortgage News Daily.  While Trump did not lay out a detailed housing plan, he did talk about deregulation & opening federal land for more home construction.  The National Association of Home Builders (NAHB) congratulated the pres-elect with a statement from its chair, Carl Harris, saying, “NAHB looks forward to working with the incoming Trump administration and leaders in Congress from both parties to enact a pro-housing legislative and regulatory agenda that increases the nation’s housing supply and eases the nation’s affordability woes.”  Big builders have been buying down mortgage rates for their customers, but that has been cutting into their margins.

Mortgage rates surge higher on Trump victory, causing housing stocks to fall

Donald Trump made a wide array of promises on the campaign trail in recent months that he will now need to implement after a decisive victory set him up for a return to the Oval Office in 2025.  Some of them will be easier for him to do by himself than others.  On 2 of his signature promises, a new wave of tariffs on imports from around the world & a "mass deportation" of undocumented immigrants, an American pres is imbued with considerable authority to act unilaterally.  And Trump has given every indication he intends to try.  In a speech today, Trump said "America has given us an unprecedented and powerful mandate" & promised to move quickly.  Other priorities will require more partners.  The still unsettled picture of who will control the House of Representatives will shape what Trump is able to implement on issues like tax cuts & a rollback of green energy credits.  The control of the House is still up for grabs with over 50 races still to be called.  Reps also took control of the Senate, meaning that if they can eke out a win in the House, they would largely have complete control over DC's levers of power.

What's next for Trump's key campaign promises

Gold tumbles to the $2660s due to the US $ strengthening after Rep nominee Donald Trump was named the winner of the US presidential election.  USD is gaining due to the market view that Trump's economic agenda & tariffs will strengthen the US $.  This, in turn, is negative for gold since it is mainly priced $ is traded in $s.  Gold is also losing ground due to capital rotating out of gold & other safe-havens into riskier assets such as Bitcoin & equities.  Trump's claims that he can end the conflicts in the Middle East & Ukraine, though seemingly exaggerated ("I will have that war (Ukraine-Russia) settled in one day – 24hrs," Trump once said), could also be reducing safe-haven flows into Gold.

Gold plummets almost three percent after Trump wins election

Oil slumped as traders monitored the US presidential election & an industry report signaled a gain in stockpiles.  Brent crude fell below $75 a barrel, with West Texas Intermediate near $71.  A gauge of the $ advanced, weighing on most commodities.  The outcome of the race for the White House carries the potential for significant shifts in US foreign, energy& climates policy.  Crude has been buffeted in recent weeks by shifting perceptions of risks to supplies in the Middle East, with Iran escalating its rhetoric against Israel.  In addition, the OPEC+ alliance pushed back a plan to start restoring barrels to the market for a 2nd time.  Some traders have been hedging against $100-a-barrel oil if hostilities in the Middle East ratchet up after the US election.  Brent for Jan fell 0.9% to $74.84 a barrel & WTI for Dec declined 0.8% to $71.38 a barrel.

Oil Declines as Traders Zero In on US Election, Dollar Surges

At the opening, Dow had a whopper size gain & remained elevated for the entire session.  Investors are cheering former Pres Donald Trump's reelection, with all 3 of the major indices soaring ahead of the Federal Reserve's Nov meeting tomorrow.  Important to keep in mind, nobody knows how today's stock market activity will affect Jerome Powell when he gives his report on the Fed meeting.  Meanwhile the market waits for the final results of the House races to determine if Reps will control Congress along with the White House.  Additionally over 1000 stocks on the NYSE during today's soaring market.

Markets skyrocket as Trump retakes the White House

Dow surged 1264, advancers over decliners a very modest 4-3 & NAZ jumped 361.  The MLP index advanced 5+ to about 291 & the REIT index tumbled 11+ to the 415s.  Junk bond funds crawled a little higher & Treasuries were very heavily sold, taking yields substantially higher.  Oil drawled higher in the 72s & gold tumbled 66 to 2689.

Dow Jones Industrials

U.S. stocks soared as Donald Trump defeated VP Kamala Harris in one of the most contentious elections in U.S. history.  The Dow jumped over 1000 at the opening bell, continuing the climb seen in the pre-market session after the pres elect took the stage at his headquarters in Florida early morning, thanking his supporters & promising to restore the country.  "We're going to pay you back. We are going to do the best job. We're going to turn it around. It's got to be turned around, and it's got to be turned around fast. And we're going to turn it around" said Trump.  All 3 of the major stock market averages are on pace for a record close.  Trump invited JD Vance, the presumptive new VP, to the podium to speak, & he spoke about reviving the US economy, a top election issue.  "We're going to lead the greatest economic comeback in American history under Donald Trump's leadership," Vance said.

Trump's White House win sends Dow up 1,000 points

Treasury yields surged as Donald Trump won the US presidential election, with a Rep sweep in Congress possibly also in the cards.  The 10-year Treasury yield jumped 17 basis points to trade at 4.461%, hitting its highest level since Jul as investors bet a Trump presidency would increase economic growth, along with fiscal spending.  The yield on the 2-year Treasury was up by more than 7 basis points to 4.278%, reaching its highest level since Jul 31.  1 basis point is equivalent to 0.01% & yields & prices have an inverted relationship.  The projection is Reps are expected to regain majority control of the Senate in 2025.  The House was still up for grabs, leaving open the possibility of a Rep sweep.  The general thinking ahead of the election was that bond yields could see a big pop in the event of a Trump win, & they could surge in a Rep sweep, where the party captures control of Congress & the White House.  That is because Reps may introduce tax cuts & steep tariffs, moves that could spark economic growth, but also widen the fiscal deficit & reignite inflation.

10-year Treasury yield posts huge leap to 4.46% on Trump win, possible GOP Congress sweep

European officials have been quick to congratulate Donald Trump after he defeated his Dem rival Kamala Harris to return to the White House, despite a stark realization that renewed economic warfare could be just around the corner.  European diplomats & their respective leaders have been preparing for the eventuality of a Trump victory for more than 12 months, placing a growing focus on policies that could protect the European economy from potential trade disputes.  Some European officials woke up to election results today “not wanting to believe” them, several sources said.  “I am seeing it, [and] not wanting to believe,” said 1 EU official, who did not want to be named.  “But I am not as shocked as last time.”  Many European leaders did not enjoy Trump's style of confrontational leadership during his first presidency, & there were several moments of tension with the former White House leader.  As a result, many in Brussels celebrated the victory of Joe Biden in 2020, hoping for a better engagement.

Europe praises Trump’s victory amid wider fears of an economic nightmare

Stocks surged as investors digested Donald Trump's victory in the US presidential election.  Outside of the presidential election, Reps have also flipped the Senate.  Control of the House of Representatives remains unclear (& likely will be for days or even weeks).  Trump's policies had been viewed by some experts as more positive for the financial sector.  Today the FOMC meeting begins & they will have a lot to talk about!!!

Markets rise as traders wait for election results

Dow shot up 427 near session highs, advancers over decliners better than 4-1 & NAZ advanced 259.  The MLP index gained a very big 4+ to the 284s & the REIT index went up 3+ to the 426s.  Junk bond funds remained mixed & Treasuries finished little changed.  Oil edged higher into the 72s & gold inched up 2750 (more on both below).

Dow Jones Industrials 

The Federal Reserve Chair Jerome Powell have a lot riding on the election, even as the central bank has spent 2024 keeping as much distance as it can from politics.  The next pres is set to fill multiple open positions, &, with Powell's term at the central bank ending in May 2026, he or she will also be able to choose the next face of US monetary policy.  Perhaps the key question, as Kamala Harris signals a more status quo approach if she wins, is whether Trump would offer a deeper level of disruption than what he displayed in 2017- 2021.  During his first term, he attacked Powell with regularity & openly pushed for the actions he wanted, even once suggesting negative interest rates.  And he has signaled he could go further if he has a 2nd term in office.  Fed policymakers will also have a chance to discuss the implications this week as the Federal Open Market Committee gathers tomorrow & Thurs, with Powell at the head of the table.  The main topic for Fed officials will be whether to make the 2nd interest rate cut of 2024, with markets pricing in a 25 basis point cut this week, but the political fallout will be on their minds as well.

The Fed has a lot at stake on the vote's outcome

Amazon (AMZN) said it received regulatory approval to begin flying a smaller, quieter version of its delivery drone, the latest step in its long-running efforts to get the futuristic program off the ground.  The company unveiled  the new drone, called the MK30, in Nov 2022 & said then that the MK30, in addition to the other changes, would fly thru light rain & have twice the range of earlier models.  AMZN said the Federal Aviation Administration's (FAA) approval includes permission to fly the MK30 over longer distances & beyond the visual line of sight of pilots.  The agency granted a similar waiver for Amazon's Prime Air program in May, though that was limited to flights in College Station, Texas, 1 of the cities where it has been conducting tests.  Alongside the FAA approval, Matt McCardle, head of regulatory affairs for Prime Air, said the company is starting to make drone deliveries.  In Apr, AMZN said it planned to spin up drone operations in Tolleson, a city west of Phoenix, after it shut down an earlier test site in Lockeford, California.  The company will dispatch the drones near 1 of its warehouses in Tolleson as it looks to integrate Prime Air more closely into its existing logistics network & further speed up deliveries.  An FAA spokesperson said the agency granted AMZN permission to conduct beyond visual line of sight deliveries in Tolleson on Oct 31.  AMZN founder Jeff Bezos first unveiled plans for the ambitious service more than a decade ago, remarking at the time that the program could be up & running within 5 years.  Despite AMZN investing Bs of $s into the program, progress has been slow.  The stock rose 3.72.

Amazon gets FAA approval for new delivery drone as it begins tests in Arizona

State-run producer Saudi Aramco will sell its flagship Arab Light crude grade at a premium of $1.70 a barrel to the regional benchmark, according to a price list from the company, compared with $2.20 this month.  The company was expected to cut the premium by 45¢ a barrel, according to a survey of traders & refiners.  Sluggish demand growth, particularly slack crude use in China, & concern that added supply will leave extra crude in the market have helped keep oil prices in check this year.  So far markets have shrugged off concerns about the widening Middle East conflict as the heightened geopolitical tension has failed to interrupt physical crude supply.  Global benchmark Brent crude traded around $75 a barrel this week.  The OPEC+ alliance, led by Saudi Arabia & Russia, has been curtailing output to prop up the market with group-wide cuts in production extending throughout next year.  Group members that made voluntary output cuts won't go ahead with a plan to begin rolling back reductions in Dec.  This is the 2nd delay to its plans to revive supply, as oil prices continue to struggle amid a fragile economic outlook.  Further delays in production increases may do little to bolster prices.  Global markets still face a glut next year even if OPEC+ refrains from increasing supplies, the Intl Energy Agency in Paris estimates.

Aramco Cuts Oil Prices to Asia for December After OPEC+ Delay

Front-month gold futures settle up 0.2% to $2740 an ounce, while SPDR gold shares are up 0.1%.  The moves come as the Presidential candidates entered the day seemingly deadlocked.  But, a win by either Harris or Trump isn't expected to alter the trajectory for gold prices much.  The US national debt is expected to rise under either candidate regardless of who ultimately wins.  This has been a significant tailwind for gold in the months leading up to the election.  Until the election concludes, volumes are expected to stay limited.

Gold Inches Higher as U.S Election Day Progresses

Oil futures climbed, with US & global benchmark prices looking to post their 5th straight session gain as investors await the outcome of a contentious & close US presidential election.  West Texas Intermediate crude for Dec rose 68¢ (1%) to $72.15 a barrel & Jan Brent crude the global benchmark, was up 78¢ (1%) at $75.86 a barrel.  Oil prices maintained an upward trend, up a 5th day in a row, as risk taking remains limited with many headlines expected in the next few days, coming from the Federal Reserve's Policy meeting, China's congressional meeting that will determine governmental stimulus & the US election.  Oil was building on yesterday's gains, which saw WTI rise nearly 3% & Brent end with a gain of 2.7%, following a weekend announcement that OPEC+ members would hold off on unwinding 2.2M barrels a day in production cuts until year-end.  The cuts had been set to expire at the end of Nov.  When initially announced in the summer, the cuts had been scheduled to be unwound beginning in Oct.  Otherwise, the election, along with the Federal Reserve's policy meeting & China's National People's Congress, has led to cautious trading, with market participants on the sidelines

Oil prices up for a fifth straight session as traders await U.S. election results

Stocks jumped higher as Americans flocked to the polls on Election Day, with investors settling in to see whether Kamala Harris or Donald Trump will shape the future economy.  Investors are buckling in for market volatility, as the outcome may not become clear for days, or even weeks, if the result is disputed.

Markets climb after stronger-than-expected Oct services sector data

Dow jumped 315, advancers over decliners about 3-1 & NAZ gained 198.  The MLP index added 3+ to the 283s & the REIT index rose 1 to the 422s.  Junk bond funds were mixed & Treasuries had selling which raised yields (more below).  Oil was up about 1 to the 72s & gold added 5 to 2752.

Dow Jones Industrials

The Intl Association of Machinists & Aerospace Workers Local 751, which represents 33K members in Seattle, said it has accepted a new contract with Boeing (BA), a Dow stock, ending the union's strike after nearly 2 months.  The union said machinists voted by 59% to accept the company's proposal, which includes a 38% pay raise over 4 years that would ultimately increase salaries from $76K to $119K.  The proposal also included ratification & productivity bonuses.  BA did not agree to the reinstatement of a company pension plan, which was highly sought after by union members, but did offer company matching contributions for workers' 401(k) plans.  IAM 751 posted last night that workers can return to work as early as Wed & must return by the beginning of shift on Nov 12.  CEO Kelly Ortberg, who joined the company in Aug, said he is "pleased to reach a ratified agreement" with the machinists.  "While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company," Ortberg said.  "This is an important time in our history, and like generations before us, we will face into the moment together, and stronger as one team."  BA was losing more than $1B per month in revenue due to the strike, according to an estimate that was released before Ortberg announced the company would cut 17K jobs (10%) of its global workforce.  BA stock fell 1.22.

Boeing strike ends after labor union accepts contract offer, announces return to work

Treasury yields were modestly higher as investors readied themselves for the presidential election.  The 10-year Treasury yield was up by more than 4 basis points at 4.355% & the yield on the 2-year Treasury was also up more than 5 basis points at 4.232%.  1 basis point is equivalent to 0.01% & yields & prices have an inverted relationship.  Yields ticked higher during the day after the Institute for Supply Management's Oct reading for services came in stronger than expecting.  The services purchasing managers' index came in at 56.0, the highest reading since Jul 2022.  The forecast was expecting a reading of 53.7.  Factory orders fell to 0.5% in Sep, the Census Bureau said.  This met expectations.

Treasury yields rise slightly as traders monitor U.S. election

Restaurant Brands Intl (QSR) reported quarterly earnings & revenue that missed expectations as domestic same-store sales growth for all 4 of its chains fell short of estimates.  EPS was 93¢ adjusted vs 95¢ expected & revenue was $2.29B vs $2.31B expected.  Worldwide same-store sales grew just 0.3% in the qtr.  Burger King, Firehouse Subs & Popeyes all reported same-store sales declines in their home markets.  But so far in the 4th qtr, same-store sales trends have improved.  “October now is, for the whole business, positive, low-single digits of same-store sales, which is an improvement from what we saw in [the third quarter],” CEO Josh Kobza said.  He credited more successful marketing promotions & better consumer sentiment in the US for the improvement in sales.  “If you look at some of the things that really drive finances for our guests, everything from gas prices are down, interest rates are starting to go down, inflation has really started to moderate a fair bit,” Kobza added.  Burger King's same-store sales fell 0.7% during the 3-month period that ended Sep 30.  The forecast had expected the metric to be flat.  The chain is in the middle of a turnaround in the US, but consumers are also spending less at restaurants, reigniting the value wars between Burger King & its rivals.  QSR trimmed its outlook for full-year system-wide sales growth to 5.0-5.5%, down from its prior range of 5.50% to 6.00%.  QST stock dropped 1.63.

Burger King parent Restaurant Brands falls short of Q3 revenue expectations

Stocks traded firmly in the green as Election Day got underway, with investors settling in to see whether Kamala Harris or Donald Trump will shape the economy as the next pres.  Investors are buckling in for market volatility, as the outcome may not become clear for days, or even weeks, if the result is disputed.  Given the huge difference in the candidates' stances on the economy, a long wait for a declared winner could inject more uncertainty for markets.

Markets pause in volatile trading ahead of presidential election

Dow retreated 257, advancers over decliners 3-2 & NAZ fell 59.  The MLP index was up 1 to 280 & the REIT index rose 4+ to the 431s.  Junk bond funds were basically flattish & Treasuries saw more buying ahead of the Fed meeting & that reduced yields.  Oil jumped 2 to the low 71s & gold slid 2 to 2746 (more on both below).

Dow Jones Industrials 

Boeing's (BA), a Dow stock, more than 32K striking machinists will vote for the 3rd time on a contract proposal.  If a simple majority approve the offer, it would end the more than 7-week work stoppage that has halted most of the struggling airplane production, another curveball in what execs had once cast as BA's turnaround year.  Results are expected after polls close tonight.  The proposal includes 38% raises over 4 years, up from the 35% increase BA proposed & workers rejected late last month, extending the strike.  The deal that kicked off the strike in Sep had 25% raises, while the union had originally pushed for pay increases of about 40%.  BA said machinist pay will average $119K at the end of this contract proposal.  Workers have complained about the skyrocketing cost of living in the Seattle area, where most of BA's aircraft are produced.  But the union, upon unveiling the proposal last Wed, warned this deal might be as good as workers are going to get.  “In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor,” the International Association of Machinists & Aerospace Workers District 751 said.  “We are at that point now and risk a regressive or lesser offer in the future.”  The stock rose 52¢.

Striking Boeing machinists vote on union-backed contract proposal, this time with a warning

Retailers are facing a tough equation as they head into the all-important holiday shopping season, this time over DEI initiatives.  Companies are bracing for blowback related to policies around diversity, equity & inclusion & are hoping to avoid alienating customers who may deem the brands too woke, or not woke enough.  Some are tapping outside advisors for advice on how to avoid criticism, while others are opting out of public events on the topic as backlash against equity & inclusion programs grows in the lead-up to the 2024 presidential election.  “There’s a clear sentiment in the retail community that nobody wants to get Tractor Supply'd,” (TSCO) said 1 retail industry insider, referring to that company's decision to walk back a series of DEI initiatives after conservative activist Robby Starbuck criticized the policies online.  “Retailers left to their own devices would like to be very proactive on DEI,” said the person.  “But now they don’t want any of their views to be public because they want to be able to sell stuff to everybody, and it’s become such a stupid political issue.”  The retail industry’s concerns over DEI come after a number of high-profile, consumer-facing companies some of their equity & inclusion policies in recent months.  The changes included ending sponsorships for Pride festivals & cutting ties with the Human Rights Campaign, an LGBTQ+ advocacy group.  Across industries, some companies have also cut positions for DEI roles.  Between 2019 & 2022, new jobs for chief diversity & inclusion officers spiked nearly 170%, according to a LinkedIn study, but over the last year, new jobs for such roles have fallen while companies have cut staffers & downsized programs that fell under DEI.  When explaining their decisions to cut back on DEI, some companies cited the recent Supreme Court decision that outlawed affirmative action as a catalyst for reviewing their policies.  Privately, many retailers are concerned about losing customers & becoming the subject of conservative backlash, industry insider said.

Retailers brace for DEI blowback in lead-up to election, holiday shopping season

Tesla China sold 68K vehicles wholesale in Oct 2024, as per data released by the China Passenger Car Association (CPCA).  The results represent a 22.7% decline from the 88K vehicles sold wholesale in Sep 2024 & a decline of 5.3% from Oct 2023's 72K units.  The CPCA has not yet released how many vehicles were exported by TSLA China last month. Thus, the electric vehicle maker’s domestic sales for Oct are yet to be determined.  However an independent estimated 47K domestic vehicle deliveries during the month.  Data compiled by industry watchers suggest that in the Jan-Oct 2024 period, TSLA China sold 744K vehicles wholesale.  This represents a 3.5% decline compared to the company's figures from the previous year.  It should be noted, however, that TSLA China’s YTD domestic sales are so far up 6.5% year-over-year as of the week ending Oct 27, 2024.  Its best-selling vehicle, the Model Y, seems to be maintaining its hold in China's new energy vehicle segment, with industry watchers suggesting that the all-electric crossover’s domestic sales have accumulated 373K units this year.  If these estimates are accurate, it would mean that the Model Y is still 1 of China's best-selling NEVs.  Elon Musk has previously noted that TSLA could match its record deliveries in 2023 this 2024.  To achieve this, the electric vehicle maker would have to deliver about 515K vehicles this Q4 2024.  This is a pretty ambitious target, though it might be feasible if TSLA China sees some momentum in Nov & Dec.  TSLA stock dropped 6.14.

Tesla China sells 68,280 vehicles wholesale in October 2024

Gold edged lower as traders turn cautious with the $ & yields falling ahead of tomorrow's US presidential election & this week's interest-rate decision from the Federal Reserve.  Gold for Dec delivery was last seen down $3 to $2746 per ounce.  The rise comes ahead of the US election, with polls showing a tight race between Donald Trump & Kamala Harris, as the 2 candidates offer much different economic policies.  Harris is expected to continue much of the Biden Administration's policies while Trump plans blanket tariffs on imports.  A Dem victory could be met with claims of cheating & political unrest that prompt safe-haven buying.  The Federal Reserve's policy committee will release its latest interest-rate decision on Thurs, with the group widely expected to follow its prior 50 basis point cut with a 25 basis point drop in rates.  The $ was lower ahead of the vote, with the ICE dollar index last seen down 0.41 points to 103.87.  Treasury yields were lower, with the US 2-year note last seen paying 4.189%, down 3.5 basis points, while the yield on the 10-year note was down 7.9 basis points to 4.318%.

Gold Edges Down Even as Dollar and Yields Drop Ahead of U.S. Election and Fed Meeting

Oil advanced after OPEC+ agreed to push back its Dec production increase by 1 month & tensions escalated again in the Middle East.  Brent rose as much as 2.5% to more than $74 a barrel, while West Texas Intermediate climbed above $71.  Saudi Arabia and its allies delayed a series of monthly output hikes until early next year, a move anticipated by many traders amid fragile market conditions.  Meanwhile, Iran escalated its rhetoric against Israel with supreme leader Ayatollah Ali Khamenei warning of a "crushing response" in a speech yesterday.  A reported said that Tehran told allies an attack would come after the US presidential vote but before Jan's inauguration & wouldn't be limited to missiles and drones, as 2 previous strikes were.  Oil prices have become increasingly volatile, with concerns of an oversupply next year & lackluster demand in top importer China weighing against unrest in the Middle East, which supplies about 1/3 of the world's crude.  While futures fell early last week after the strike by Israel on Iran avoided energy infrastructure, they later pared the decline on concerns the move lower was too strong.  Brent for Jan rose 2.5% to $74.90 a barrel & front-month futures fell 3.9% last week.  WTI for Dec increased 2.6% to $71.33 a barrel.

Oil Rises as OPEC+ Delays Output Hike

The neck-&-neck race has investors bracing for volatility on Election Day.  All predictions are that it should be a very close election, making it impossible to come up with a reliable forecast.  Hope for the best.

Markets slip ahead of Election Day

Dow dropped 157, advancers over decliners about 3-1 & NAZ gained 40.  The MLP index was up 2+ to the 281s & the REIT index added 3+ to the 421s.  Junk bond funds wavered & Treasuries were purchased which reduced levels sharply from recent high levels (more below).  Oil added 1+ to go over 70 on extended OPEC+ cuts & gold was steady at 2749.

Dow Jones Industrials

The manufacturing sector continued to shed jobs in Oct, bringing its tally of job losses to 78K over the past 3 months.  The Labor Dept's Bureau of Labor Statistics released its jobs report for Oct, which found that the manufacturing sector lost 46K jobs last month, according to the agency's preliminary analysis.  That followed a loss of 6K jobs in Sep, which is also a preliminary figure, as well as a decline of 26K jobs in Aug.  Manufacturing's job losses in Sep included a decline of 44K in the transportation equipment manufacturing industry due to strike activity.  That can be partially attributed to the ongoing strike by roughly 33K unionized machinists at Boeing (BA), a Dow stock.  The Intl Association of Machinists & Aerospace Workers (IAM) began its strike on Sep 13 & has previously rejected BA''s new contract offers amid the impasse, though the company extended a fresh offer to the union late Thurs that's under consideration.  The BA strike has also rippled thru the aerospace giant's supply chain, causing some of its suppliers to temporarily furlough workers while the labor disruption impacts operations.  The sector's best job creation month in the past 12 months was a gain of 25K jobs in Nov 2023, which was followed by an increase of 12K jobs the following month in Dec.  In 2024, the manufacturing sector's last monthly jobs gain occurred in Jul, when it grew by 6K jobs.  Its largest monthly gain this year was in Apr when 7K jobs were added.  The National Association of Manufacturers (NAM) has called for the next administration & Congress to restore tax incentives for capital investments in expanding or upgrading facilities & equipment, as well as easing regulations that can be costly to implement.

Manufacturing sector sheds 78K jobs in last three months

Treasury yields were lower as investors braced for a busy week which will see voters head to the polls for the presidential election & the Federal Reserve's next interest rate decision.  The yield on 10-year Treasury was last down by 9 basis points, hovering around 4.272% & the yield on the 2-year Treasury was last down by more than 6 basis points to 4.137%.  1 basis point equals 0.01% & yields & prices move in opposite directions.  Investors are gearing up for the highly anticipated presidential election tomorrow & will also be paying close attention to which party will take control of Congress.  Depending on whether the  House of Representatives & Senate are split, or if they are controlled by the same party coupled with a White House victory, there could be varying implications for the economy & markets.  Investors are also focused on the Fed's interest rate decision at the central bank's policy meeting.  The decision will be followed by comments from Fed Chair Jerome Powell, which could provide hints about the Fed's expectations for the economy & interest rates for the coming months.  On the economic front, factory orders for Sep fell 0.5%, the Census Bureau said, matching expectations

Treasury yields fall as investors brace for U.S. presidential election

Ford (F) reported a 15.2% increase in US new vehicles sales last month compared with subdued levels due to a union strike in Oct 2023.  The year-over-year sales increase was led by a 29.2% improvement in sales of its trucks, which were among the first vehicles impacted by the United Auto Workers' strike during contentious contract negotiations last year.  Ford said its total US market share increased 0.6 percentage points to 12.6% in Oct.  The automaker's sales gain outpaced the industry’s estimated increase of 10% last month compared with a year earlier.  Sales of hybrid vehicles, which Ford has been emphasizing amid a slower-than-expected adoption of electric vehicles, were up 38.5% last month compared to Oct 2023.  Its EV sales were down by 8.3%, while sales of traditional vehicles with internal combustion engines were up 14.1%.  EV sales remain up 38.2% for the year thru Oct compared with the same timeframe in 2023.  The Oct sales decline for EVs comes days after the company confirmed plans to idle production of its all-electric F-150 Lightning from Nov 18 until Jan 6, including previously planned holiday downtime at the end of the year.  US sales thru Oct were up 3.8% to more than 1.7M vehicles sold.  The stock rose 23¢.

Ford’s October sales up 15.2% from subdued levels due to labor strike in 2023

Stocks were little changed, gearing up for a week of potentially huge market-moving events, the presidential election & the Federal Reserve policy decision.  A solid earnings season & interest rate-cut optimism are giving the market reasons to be cheerful ahead of tomorrow's election, a big risk event for markets.  The new president will set the course for the economy in the years that follow.

Markets rebound as traders shrug off downbeat jobs data

Dow remained higher, up 288, decliners modestly ahead of advancers & NAZ rose 144.  The MLP index gave back 1+ to the 279s & the REIT index was off 4+ to the 417s.  Junk bond funds were little changed & Treasuries selling drove yields higher.  Oil after falling midday, finished up chump change above 69 & gold was off 1 to 2747 (more on both below).

Dow Jones Industrials 

Exxon Mobil (XOM), a Dow stock & Dividend Aristocrat, beat 3rd-qtr earnings expectations, as the oil major reached its highest liquids production level in more than 4 decades.  “This quarter is one of the best third quarters we’ve had in the past decade,” Exxon CEO Darren Woods said.  “In the upstream, we see record volumes coming from our advantaged assets like Guyana and the Permian.”  The oil major booked EPS of $1.92, compared with $2.25, in the year-ago period.  Profits have declined as refining margins & natural gas prices have pulled back from historically high levels in 2023.  Revenue fell less than 1% to $90B.  The company returned $9.8B to shareholders in the qtr & increased its 4th-qtr div to 99¢.  It has reached its highest production level in more than 40 years at 3.2M barrels per day.  The stock fell 1.80.

Exxon beats earnings estimates, increases fourth-quarter dividend

Chevron (CVX), a Dow stock & Dividend Aristocrat, beat 3rd-qtr earnings & revenue expectations, returning a record amount of cash to shareholders.  Quarterly profit, however, declined substantially compared with the year-ago period due to lower margins on refined product sales, lower prices & the absence of favorable tax times.  CVX is aiming to streamline its portfolio, with asset sales in Canada, Congo & Alaska expected to close in the 4th qtr of 2024. The company is also targeting $2-3B in cost reductions from 2024 thru the end of 2026.  EPS was $2.48, down 31% from $3.48n the 3rd qtr of 2023.  When adjusted for foreign currency impacts, the company reported EPS of $2.51, solidly topping expectations for the qtr.  Revenue was $50.7B, also beating expectations but declining 6% from the $54.1B reported in the 3rd qtr last year.  The oil major returned a record $7.7B to shareholders in the qtr, including $4.7B in share buybacks & $2.9B in divs.  CVX produced 3.36M oil-equivalent barrels per day in the qtr, a 7% increase over the 3rd qtr of 2023, driven by record output in the Permian Basin.  “Production was our highest third quarter ever in the history of the company,”  CEO Mike Wirth said  The stock rose 4.22.

Chevron beats earnings expectations, returns more than $7 billion to shareholders

A closely watched index that measures US manufacturing activity fell to 46.5 in Oct from 47.2 in the prior month, according to the Institute for Supply Management (ISM).  This is the 7th straight month below the 50 threshold for growth & the lowest reading since Jul 2023.  The forecast called for the index to inch up to 47.6% in Oct from 47.2% in the prior month.  New orders for factory goods rose 1.0 to 47.1% in Oct.  New orders have fallen in 25 out of the past 26 months.  Exports orders contracted moderately in Oct.  Production dipped 3.6 points to 46.2% & employment shrunk in Oct, but at a slower rate.  The prices paid index jumped to 54.8% from 48.3%.  The manufacturing sector remains sluggish, said Timothy Fiore, chair of the ISM's factory survey.  Recent readings were consistent with a slowdown & remain far away from recessionary readings, he added.  At the same time, a pickup was unlikely until 2025, he continued.

ISM factory index drops, marking 7th straight month below growth

Spot gold fell 0.2% to $2736 per ounce.  Prices fell 1.5% yesterday as some traders took profit after bullion hit a record high of $2790.  US gold futures settled largely steady at 2749.  Nonfarm payrolls increased by 12K jobs last month, the smallest gain since Dec 2020, affected by disruptions from hurricanes & strikes by aerospace factory workers. The $ erased earlier losses & gained 0.4%, while benchmark 10-year Treasury yields also rebounded from an earlier drop, making non-yielding gold less appealing.

Gold edges lower as U.S. dollar, yields rise

WTI & Brent oil still end lower for the week.  Oil futures finished, finding support after a news reports that Iran may be planning another major strike on Israel, which would continue a spiral of retaliatory actions between the 2 countries that could threaten crude flows from the Middle East.  Prices for US & global benchmark crude, however, pared back some of their earlier gains & held on to a loss for the week, after a drop to their lowest settlement in 7 weeks on Tues as traders breathed a brief sigh of relief that a retaliatory strike by Israel had spared Iran's oil facilities & infrastructure last weekend.  West Texas Intermediate crude for Dec rose 23¢ to settle at $69.49 a barrel.  Prices based on the front month ended down 3.2% for the week after they had posted a monthly gain of 1.6% for Oct.  Jan Brent crude, the global benchmark, gained 29¢ (0.4%) to $73.10 a barre, losing nearly 3.4% for the week.  Axios, citing 2 unnamed Israeli sources, reported late that Israeli intelligence had suggested Iran is planning a major retaliatory strike on Israel from Iraq, perhaps as early as next week before the US presidential election.

Oil prices lifted by report Iran may be planning another major strike on Israel

Stocks had a comeback as investors welcomed a big miss in the monthly jobs report.  Today's economic reports are the last major economic data before the Federal Reserve's next policy decision on Nov 7.  Market expectations for that meeting moved little in its wake, with traders pricing in about 99% odds of a qtr-point rate cut at the Fed meeting next week.  For a wild week, Dow slid back a modest 164.        42,114   42,049    -164

Markets bounce back as investors parse latest tech earnings

Dow recovered 543, advancers over decliners 2-1 & NAZ shot up 249.  The MLP index hovered above 280 & the REIT index crawled up 1 to the 423s.  Junk bond funds were mixed & Treasuries were hit with selling which raised yields.  Oil was up 1+, taking it over 70, & gold added 6 to 2755 after yesterday's sharp decline.

Dow Jones Industrials

Apple's (AAPL), a Dow stock, 2nd-largest division after the iPhone has turned into a $100B a year business that investors love.  In its earnings report, the company said it reached just under $25B in services revenue, an all-time high for the category &12% growth on an annual basis.  “It’s an important milestone,”  CFO Luca Maestri said.  “We’ve got to a run rate of $100 billion. You look back just a few years ago and the the growth has been phenomenal.”  AAPL first broke out its services revenue in the Dec qtr of 2014 when it was $4.8B.  The services unit has become a critical part of AAPL's appeal to investors over the past decade.  Its gross margin was 74% in the Sep qtr compared to AAPL's overall margin of 46.2%.  Services contains a wide range of different offerings.  According to SEC filings, it includes advertising, search licensing revenue from Google (GOOGL), warranties called AppleCare, cloud subscription services such as iCloud, content subscriptions such as the company’s Apple TV+ service, & payments from Apple Pay & AppleCare.  AAPL boasts to investors that its sales from Services will grow alongside its installed base.  After someone buys an iPhone, they're likely to sign up for AAPL's subscriptions, use Safari to search Google, or buy an extended warranty.  On a 2016 earnings call CEO Tim Cook told investors to pay attention.  “I do think that the assets that we have in this area are huge, and I do think that it’s probably something that the investment community would want to and should focus more on,” Cook said.  AAPL's 4th-qt results beat expectations for revenue & earnings, but net income slumped after a 1-time charge as part of a tax decision in Europe.  The stock fell 2.86.

Apple’s services unit is now a $100 billion a year juggernaut after ‘phenomenal’ growth

US job growth slowed down in Oct, coming in well short of expectations, while the unemployment rate was unchanged.  The Labor Dept reported that employers added 12K jobs in Oct, well below the 113K gain that was predicted & the unemployment rate was 4.1%, in line with expectations.  The number of jobs added in the prior 2 months were both revised downward, with job creation in Aug revised down by 81K from a gain of 159K to 78K, while Sep was revised down by 31K from a gain of 254K to 223K.  Private sector payrolls contracted by 28K in Oct after economists projected they would rise by 90K.  The manufacturing sector saw employment decline by 46K jobs in Oct, which the Bureau of Labor Statistics (BLS) noted was largely due to strike activity in the transportation equipment manufacturing sector.  About 33K unionized machinists at Boeing (BA), a Dow stock, have been on strike since early Sep.  The construction sector added 8K jobs below the average of 20K jobs per month in the past 12 months.  Health care added 52K jobs in Oct, near its average monthly gain of 58K in the last year.  The gov added 40K jobs in Oct, mostly in line with its average monthly gain of 43K over the past 12 months.

US economy added 12,000 jobs in October, well below economists' expectations

Amazon's (AMZN) online advertising business brought in $14.3B in the 3rd qtr, up 19% year over year, in line with estimates of $14.3B.  The tech giant revealed the financial results of its growing advertising unit as part in its latest earnings report.  AMZN's overall 3rd-qtr sales were $159B, ahead of the estimate for $157B.  The online advertising business is still a fraction of the company's overall business, but its growth over the years has made it a major competitor.  The stock jumped 13.31 (7%).

Amazon’s advertising business grew 19% in the third quarter

Stocks rebounded as investors digested a big miss in the monthly jobs report & welcomed earnings from AMZN & other tech companies.  Markets took in stride the disappointing headline numbers in the all-important jobs report (above) when the US economy significantly missed expectations. The gov said those numbers were weighed down by recent hurricanes & strike activity, most prominently at BA.  With today' rise, Dow is down 250 this week.