SVET Reports
Tuesday's Markets Update (November 5, 2024)
On Tuesday, stock futures rose as election results began to emerge. Harris is expected to win Vermont, while Trump is projected to take Kentucky, Indiana, and West Virginia. Investors are also watching the balance of power in Congress, which may affect spending and tax policies. Additionally, markets anticipate a 25 basis point rate cut from the Fed. In regular trading, the Dow, the S&P, and the Nasdaq increased by 1-2%, with strong gains across all sectors. Gold held steady while oil and the Mexican peso rose due to global political uncertainties. Economic activity in key EU member countries continues to slow down. BTC is surging over $70K on expectations of Trump's victory, leaving ETH far behind at $2.5K.
Details
Business activity grew slightly in October, driven by the services sector. However, manufacturing continued to decline, and employment decreased across both sectors. Encouragingly, price inflation eased, suggesting reduced cost pressures. 1Y trend: "Up" (SP)
The trade deficit widened in September due to increased imports and decreased exports. Imports of goods like pharmaceuticals, computers, and cars rose, while exports of products like pharmaceuticals and aircraft declined. This widening deficit suggests a slowdown in the economy. 1Y trend: "Down, Deficit Increasing" (BEA)
The Logistics Manager's Index rose in October, indicating strong growth in the sector. Warehousing and transportation utilization increased, while transportation capacity improved. However, inventory levels and costs grew at a slower pace. Overall, the logistics industry is showing positive signs of recovery. 1Y trend: "Up" (LMI)
Vehicle sales rose to 16M in October, up from September. This is a significant increase from the pandemic low of 8.48M in 2020 but below the ATH of 21.71M in 2001 (16-17M is a long-time medium). 1Y trend: "Up" (NADA)
Crypto
Polymarket, a prediction platform on Polygon, has reached a record open interest of over $463M, fueled by betting on the 2024 Election Day. Tuesday was its busiest trading day, with $174M in volume, surpassing the previous high of $161 million. Since its launch in 2020, Polymarket has gained significant popularity as a gauge of public sentiment. Currently, it shows Trump at a 62% chance of winning against Harris, despite polls suggesting Harris may have a slight edge. (source)
World Markets
France's industrial production fell in September, marking the first decline since May. Both manufacturing and other sectors saw decreased output. While the quarterly trend remains positive, the monthly data suggests a slowdown in industrial activity. 1Y trend: "Side" (Insee)
Spain's unemployment rose slightly in October, though it remains at a 17-year low. While most sectors saw increases, construction experienced a decline. Youth unemployment rose significantly. Despite the monthly increase, annual unemployment figures show a 5.7% decrease. 1Y trend: "Side" (ES)
The UK service sector continued to grow in October, but at a slower pace. New business growth slowed, and export sales accelerated. However, rising costs and uncertainty about the upcoming budget led to increased prices and decreased business confidence. 1Y trend: "Down" (SP)
Currencies
The Mexican peso weakened due to political uncertainty. Concerns about a potential negative Supreme Court ruling on judicial reform and the possibility of Trump's return to the presidency have weighed on the currency. While Mexico's economic data, such as stable unemployment and strong GDP growth, could support some rate cuts, the political risks are currently overshadowing these positive factors. 1Y trend: "Up, Depreciating"
Commodities
Brent crude oil futures climbed to $75.5 per barrel amid uncertainty from the presidential election, following a 2.9% rise the previous day due to OPEC+ delaying a planned production increase. Market attention is on the election results and China's National People’s Congress, where additional stimulus may be introduced. OPEC+'s decision was influenced by weak demand and rising non-OPEC supply, while a tropical storm in the Gulf could cut U.S. oil production by about 4 million barrels. 1Y trend: "Down"
Gold prices remained steady above $2,730 per ounce as markets awaited the presidential election results. Speculation that a Trump presidency could lead to higher inflation has prompted investors to view gold as a hedge against inflation. However, the close election race has moderated these expectations. Additionally, the Fed's anticipated quarter-point rate cut on Thursday is expected to support bullion by lowering the opportunity cost of holding non-yielding assets, bolstered by hopes of similar moves from other central banks. 1Y trend: "Up"