Stocks, Yields Fall Ahead of Vote in Slow Session
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Welcome to the swamp market update podcast, where each trading day we recap tea market results and statistics. I'm Keith land's fert, and here's a summary of what happened today. Monday, november fourth, wall street lost ground in a stagnant session awaiting tomorrow's election. Losses were limited, though, as investors seemed in little mood to take on large new positions in either direction. With so much uncertainty in the air now, major indexes ended in the red, a rallying treasury market showed signs of life and the bench marten year treasury no yield drop from fridays for a months s yields move the opposite direction of treasuries.

The rally looks like unwinding of election related trades of the past few weeks at Cathy Jones, chief fixed income strategist ahsha b yields had moved up more than was justified by the economic data and are now we adJusting lower apple and its hefty market capitalization dragged the tech heavy nasdaq composite today after warn buffett's berkshire halfway reported selling another one hundred million apple shares after having its investment in apple. The prior quarter NVIDIA tug detect the other way after being added to the dow Jones industrial average. Still, neither stock carved major moves when always said and done, volatility remains elevated for both stocks and bonds ahead, but could begin to dissipate if we know an election result by thursday or friday.

Market breath has been deteriorating the last two weeks, with only forty nine percent of S M. P. Five hundreds stocks now trading above.

There are fifty day moving averages, down from seventy five percent three weeks ago. Whoever ends up in the White house long term, investors should ignore the noise and focus on their goals and financial plans. Presidential elections historically have had very little impact on markets.

Stocks, for example, are more influenced by corporate earnings, monetary policy and economic data than an election outcome. Here's where the major benchMarks ended. The S M P five hundred index dept.

Sixteen point one one points, or zero point to two eight percent to five thousand seven twelve point six nine that out Jones a destroy al average dropped two hundred and fifty seven point five nine points or zero point six one percent forty one thousand seven ninety four point six zero and the as that compose that lost fifty nine point nine three points or zero point three three percent to eighteen thousand one seventy nine point nine eight a ten year treasury note yell to fell five basis points to four point three one percent and the sea o volatility index, or vicks, edged up to twenty two point one one still below last week pigs. As stocks on the move, today's backtrack in treasury yields appeared to give small cap stocks to lift the wrestle. Two thousand went against the grain with modest gains and state above its fifty day moving average.

Lower yields typically suggest an easier borrowing climate, which tends to help smaller firms. From a sector standpoint, today was roughly a fifty fifty session in terms of winners versus losers. Energy surge dog news that OPEC would delay in output hike.

Meanwhile, info tech held its own to finish roughly flat even as semichannels ors felt pressured, but utilities lost steam on worries about data center demand. After a government ruling, conStellation energy, the largest U. S.

Nuclear plant Operator, plunged more than twelve percent. On news, the U. S. Government limited how much a nuclear power amazon could use from talent to power its data centers. The ruling raises questions about whether the government would approve similar deals that conStellation and other nuclear companies might want to sign with big attack firms. sure.

When Williams rally four point five nine percent after announcing IT will join in video in the dow Jones industrial, average shares of the paint company are already up more than forty two percent this year. Doubt CoOperated losses. It's dougan es industrial average spot.

Intel slipped almost three percent on news that is losing its place on the dawn after twenty five years, and mariot lost one point five nine percent after IT missed analysts earnings estimates and provided fourth quarter consensus earnings per share that was below wall streets, thinking demand remains strong. The company said traveling technology firms dominate earnings this week, including ARM holdings, equal com, L B N B and marriage. Many air and cruise lines reporting third quarter results were upbeat about the months ahead, but L B N B wasn't back in August when IT last reported IT results thursday afternoon and could be worth watching.

Third, god. Earnings season is almost to three quarters done, which turns thoughts toward the holiday quarter and next year. More than twice many S M, P five hundred companies have delivered negative fourth quarter guidance than positive facts.

That said, however, that's from a small sample size with only about ten percent of S M P five hundred stocks providing guidance to date. Many with negative guidance mentioned are slow down or pause in economic, business or customer activity to at least in part to the election. Facts that noted this suggests companies and their customers might be waiting until after the vote to move ahead with business plans, perhaps once they have a feel for possible government policy changes.

Speaking of policy, that could depend less on whose president and more on congressional races to determine which party controls the house and senate. Close races in some districts could determine the ultimate baLance of power. IT is possible that we won't know who controls the house for several days or even a week or two, said Michael townson, managing director of legislative and regulatory affairs, eh wab or at least six very competitive house races on the pacific coast in california, in washington.

Both states can take a very long time to count ballot. If those are among the decides of races, we may not know the outcome until next week or even later. About three hundred and fifty S, M, P. Five hundred companies have reported third go to results, and the blended growth rate that combines actual reports with remaining athletes is up to eight point four percent from four percent at the start of earnings season.

What does stand out this earnings season in his performance on the first trading day after releases, says lizer as chief investment strategist, swab, which are being rewarded by the highest margin above the index since at least the start of twenty twenty two mrs. Are being punished just portioned. Only one data released hit the tape today.

September factory orders fell zero point five percent month of a month, worse than the negative zero point four percent. Briefing that come, however, a deeper look showed factory waters up zero point one percent, excluding transportation and new orders for nondefense capital goods, excluding aircraft, a proxy for business spending rose zero point seven percent after a zero, zero point two percent rise in August. The I, S, M services P, M, I, soon after tomorrow's open, is among the more meaningful data points.

This week. The services part of the U. S. Economy has been booming, evident even in last week, mostly disappointing october.

Non foreign payroll report the show job gains concentrated in areas like health care and government prism services analysts to see a headline of fifty three point eight percent, down from fifty four point nine percent in september, but still an expansion territory above fifty percent. The Prices element of the report ticked up in september and remains in focus. Treasury options are also in the mix, which could affect yields depending on demand for the new dead.

A three year note auction today saw relatively weak demand weighing on treasuries late in the session. In helping yields off their laws, a ten year note auction looms tomorrow. The fed meeting ends thursday, one day behind Normal.

Due to the electron futures trading suggests overwhelming odds of a twenty five basis point rate cut following septembers fifty basis point cut. We expect the fed to cut the fed funds rate by twenty five basis points at this week's meeting, but forward guidance may be cautious, said jobs Jones. The fed has enough room to cut without shaking the markets confidence. The twenty five basis point cut brings the fed funds rate down to four point five percent to four point seven five percent, which is still high relative to inflation. Odds of two cuts in the final two meetings of the year standard, eighty two percent after last week, dismal october non farming payroll report the show just twelve thousand jobs created.

However, investors might want to listen to feed german's eran power after the meeting to see if there is a David tone ARM, as some expect, based on strong recent data, a more hawkish one as of late today, traders see ninety eight percent chances rates will fall twenty five basis points at the conclusion of the federal open market committee meeting thursday and a two percent chance of no move. Based on the C M I fed watch tool, this has been the swap market update podcast to stay informed of, visit swap dot com sash market update or follow the show for free in your favorite podcasting out and if you like what you've heard, please consider leaving us a reading or a review. IT really helps new listeners find the show. Join us for another update tomorrow. For important disclosures, res, see the show notes and swap dot com slash market update podcast.