Global Economic Daily - 11/05/2024

NEWS AND MARKET COMMENTARY

Global Equities

• Wall Street Shuns Risk Before Coin-Toss Election
• European Stocks Close Lower Ahead of U.S. Election; Tech Stocks Down 1%

Global Fixed Income

• Treasury Yields Fall as Investors Brace for U.S. Presidential Election
• Treasury Yields Checked Back After Change in US Election Odds Since the Weekend

Currencies

• Dollar Slips, Stocks Edge Up Before Tight US Election
• EUR/USD Surges Ahead of US Trump-Harris Battle

Energy

• Why OPEC Delayed Its Planned Oil Production Increase
• Crude Oil Continues to Look Supported

Metals

• Gold Continues to See Buyers on Dips
• Silver Continues to See Support at Same Level

Global Politics/News

• Top Wall Street Execs are Getting Skeptical on the Fed’s Easing Path
• Thousands of North Korean Troops in Russia. What Does That Mean for the War With Ukraine

Relevant Government Reports

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary

Financial

Closing Commentary

Quote of the Day: The only courage that matters is the kind that gets you from one moment to the next. – Mignon McLaughlin

Equities: Stocks stumbled on Monday as investors geared up for the U.S. presidential election and a potential Federal Reserve rate cut later this week. The Dow Jones Industrial Average slumped 257.59 points to close at 41,794.60. The S&P 500 dipped 16.11 points points to settle at 5,712.69, and the Nasdaq 100 dropped 69.54 points to 19,963.60. Trading was choppy throughout the day. The Dow at one point fell more than 400 points, while the S&P 500 and Nasdaq shuffled between gains and losses. Tuesday’s election results could play a pivotal role in where stocks finish off the year. The latest poll from NBC News shows a “deadlocked race” between former President Donald Trump and Vice President Kamala Harris. Any market aftershocks may depend on which party takes control of Congress. Major legislative changes would be difficult to pass if control of the U.S. House of Representatives and Senate is divided. A Republican or Democratic sweep, however, would likely be coupled with a White House victory for the same party, and could mean ambitious spending plans or a tax overhaul. Along with the election, Wall Street is also bracing for the latest rate decision from the Federal Reserve on Thursday. The moves in stocks Monday came as safe-haven U.S. Treasuries rallied, suggesting that some investors may be reducing risk ahead of Election Day. The benchmark 10-year Treasury was trading at a yield of about 4.3% on Monday, down from roughly 4.36% on Friday. Yields on bonds move in the opposite direction from their price. TECHNICAL OUTLOOK – The Dow and S&P are above the 14, 21 day moving average.

Metals: Gold and silver prices have traded both sides of unchanged so far today, in subdued U.S. trading Monday. It’s arguably the biggest markets-events week of the year, which has many traders and investors on the sidelines. Most of the marketplace is quieter early this week as it appears many traders and investors are holding off on placing bigger trades until after the U.S. presidential election Tuesday. However, many believe the election’s final result may not be known soon after polls close due to a very close presidential race. An Iowa poll released over the weekend showed a surprising lead by Kamala Harris. That poll threw a curve ball at the “Trump trades” that had been recently placed in belief that Donald Trump would win the election. Also on tap this week is the FOMC meeting of the Federal Reserve. The meeting starts Tuesday morning and ends Wednesday afternoon with the FOMC statement and press conference from Fed Chair Powell. Most believe the Fed will cut its main interest rate by 0.25%, especially after a weaker U.S. employment report released last Friday. China’s parliament, the standing committee of the National People’s Congress has begun a week-long meeting that ends Friday. Traders and investors are hoping that there will be an announcement detailing the size and scope “of much-promised, but so far not delivered, fiscal stimulus. It’s understood that Chinese policymakers will want to take into account the result of the U.S. presidential election,” said David Morrison of Trade Nation. The benchmark 10-year U.S. Treasury note yield is presently fetching 4.307%. Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,675.00. December silver futures bulls have the overall near-term technical advantage but have faded a bit. A three-month-old uptrend on the daily bar chart is now in some jeopardy. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $35.07. The next downside price objective for the bears is closing prices below solid support at $31.00. TECHNICAL OUTLOOK – Gold and silver are back above the 14, 21 day moving average.

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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.