Final Countdown

❗“There are advantages to being elected President. The day after I was elected, I had my high school grades classified Top Secret.” — Ronald Reagan, 40th President of the United States

Monday saw a cautious lull in market activity as investors prepped for today’s U.S. presidential election and an upcoming Fed meeting.

Positioning ahead of the election became the theme of the day, with trading volumes reflecting investors’ guarded moves. Options markets pointed to potential swings, hinting at anticipation rather than panic.

⚡ Closing Bell:

• Dow Jones: ⬇️ -0.6% to 41,794.6 – Utilities led the losses, while energy clung to modest gains.

• S&P 500: ⬇️ -0.3% to 5,712.7 – A mixed day, but still painted in red.

• Nasdaq: ⬇️ -0.3% to 18,180 – Tech remained tepid ahead of election results.

👀 Sector Watch:
① Utilities: ⬇️ -1.3% – The biggest drag, as investors rotated away from safety plays, leaving the sector with the day’s steepest drop.

② Energy: ⬆️ +0.5% – The day’s rare bright spot, as OPEC+’s production pause sent oil prices higher.

Top Movers:

• Constellation Energy (CEG): ⬇️ -12.46%
  Led the day’s losses after Mizuho cut its price target from $264 to $235. A less-than-stellar Q3 report and a revised full-year outlook sparked a sharp sell-off.

• Intel (INTC): ⬇️ -2.93%
  Took a hit as news of Nvidia (NVDA) replacing it on the Dow starting Nov. 8 sank in. Meanwhile, Nvidia shares ticked up 0.5%, readying for its blue-chip debut.

• Salesforce (CRM): ⬆️ +1.3%
  Benefited from Evercore ISI raising its price target to $400, making it the top performer on the Dow.

• Freshpet (FRPT): ⬆️ +13%
  Leaped higher on strong Q3 earnings and an upgraded full-year sales and profit forecast, fueled by double-digit volume growth.

• Mosaic (MOS): ⬆️ +5%
  Outperformed following reports of potential potash production cuts coordinated by Belarus and Russian firms.

• Exxon Mobil (XOM): ⬆️ +3%
  Benefited from a WTI crude oil rally, which gained 2.9% to hit $71.47/barrel.

Subtle Balance

Crypto markets took a breather on Monday as Bitcoin (BTC/USD) dipped 2.1% to $67,450, slipping below the key $68,000 mark.

Trading volume surged 21.3% to $38.58 billion, signaling heightened activity amid market uncertainty.

The CoinDesk Market Index, tracking 126 digital assets, fell ⬇️ 1.4% over the past 24 hours, mirroring the cautious declines seen in traditional equities.

The overall market cap contracted ⬇️ 1.4% over the past 24 hours, settling at $2.26 trillion, while trading volume rose. This combination suggests investors are adjusting positions and bracing for potential volatility ahead.

Top Crypto Movers:

• Ethereum (ETH/USD): ⬇️ -1.8% to $2,421 – Continued its slide, following Bitcoin’s downward momentum.

• Solana (SOL/USD): ⬇️ -3.51%

• XRP (XRP/USD): ⬆️ +0.2%

• Dogecoin (DOGE/USD): ⬆️ +5.54% – Bucked the trend, soaring on fresh enthusiasm from the community.

• Cardano (ADA/USD): ⬇️ -2.14%

Earnings Spotlight:

• Yum China (YUMC): ⬆️ +6% – Surged after beating Q3 EPS expectations at 77 cents, well above the 62-cent consensus

• Air Transport Services Group (ATSG): ⬆️ +25% – Jumped on reports that Stonepeak Partners is in advanced talks to acquire the company for approximately $3.1 billion, including debt.

Profit Parade:

Palantir Technologies (PLTR): ⬆️ Soared in after-hours trading after posting a record quarter. The data analytics and defense firm reported $726 million in revenue, surpassing Wall Street’s expectations, with profits reaching $144 million.
U.S. government contracts fueled a 40% year-over-year revenue boost to $320 million, while commercial revenue jumped 54% to $179 million.

• Revenue: $726M

• Profit: $144M 💰

• U.S. Government Contracts: +40%

• Commercial Revenue: +54%

CEO Alex Karp highlighted the role of their 2023-launched AI platform as a key growth driver, especially for defense and allied nations tackling new threats. With shares up 170% in 2024, Palantir has secured its spot as the third-best performer in the S&P 500 since its inclusion in September.

Ad Dollars:

Fox (FOX): ⬆️ +2.75% to $39.96
Shares climbed as the network reported stronger-than-expected profits, thanks to record political ad spending. Executives highlighted the boost from local stations, dubbing them the “election heroes” driving revenue growth.

Commodities Check: ✔️

• Crude Oil (WTI): ⬆️ +3.2% → $71.68/barrel – Rode a wave of optimism after OPEC+ postponed a production increase.

• Brent Crude: ⬆️ +2.6% → $75.03/barrel

• Gold: ⬇️ -0.1% → $2,746.70/oz – Slipped slightly as investors awaited election results.

• Silver: ⬇️ -0.2% → $32.63/oz

Economic Rundown:

• ❗Dollar Watch: The U.S. dollar weakened, falling 0.4% against the euro and yen.

This led to a decline in Treasury yields, with the 10-year yield down to 4.29%.

• U.S. 30-year yields: Fell 7.2 basis points to 4.486%.

  
  → 3-year note yields: Dropped 4 basis points to 4.139% following a weaker-than-expected auction.

  
  → Yield curve movement: Bull flattened, with the gap between 2-year and 10-year yields narrowing to 13.1 basis points, down from 17.2 basis points on Friday.

  → This flattening indicates a flight-to-safety as markets prepare for potential election disruptions.

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The Week Ahead:

• ❗ Election Day: The U.S. presidential election on Tuesday adds another layer of market uncertainty, with potential implications for future fiscal and economic policy.

• ❗Fed Watch: The Fed’s two-day meeting is kicking off on Wednesday. Markets are betting on a 25 bps rate cut by Thursday.

• Key figures on Q3 productivity, factory orders, and wholesale inventories will be released, providing a pulse check on economic resilience.

#TRUTH:

“Liberty, when it begins to take root, is a plant of rapid growth.” — George Washington

The stinger

Disclaimer

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