- October US ISM services 54.5 vs 54.8 expected
- US final October S&P Global services PMI 56.1 vs 57.9 prelim
- US September international trade balance -105.0B vs -108.0B expected
- Canada Trade Balance ($C) for September +5.35B vs +4.1B estimate
- The biggest loser of the US elections was data centers
- EIA weekly US crude oil inventories -865K vs +877K expected
- US October ADP employment +86K vs +65K expected
- House Democratic leader Jeffries says will pass bill to stop tariffs and to end the Iran War
- Trump says election loss was largely a result of the Iran war
- The market is telling the hyperscalers it’s happy about a slower data center buildout
Markets:
- WTI crude oil down $7.58 to $88.51
- S&P 500 up 1.7%
- Gold up $135 to $4063
- US 10-year yield down 6 bps to 4.89%
- NZD leads, USD lags
It was a monumental day in markets as they recalibrated following the Republican drubbing in the midterms. The votes continue to be counted but there is certain to be a large Democrat majority in the House and it appears Senate seats for Alaska and Mississippi (!) will go blue, giving them 56 in the Senate.
The blame game is on for Republicans and the Iran war is at the top of the list, including from JD Vance. Democratic leaders said they would end it and tariffs so that could be an interesting angle, even if there will be no change of control until January. The market isn’t waiting around to see how it settles as WTI fell hard on the day.
That decline translated into Treasury yields and a big lift in gold. Crypto was also a surprise winner given that it could now face regulatory headwinds.
In FX, the dollar was a moderate loser. The oil drop is a drag but hyperscalers cheered a potential slowdown in data centers, as it will boost near term FCF and diminish the need to raise equity. Microsoft and Amazon were major tailwinds for stock markets, up around 7%.
This article was written by Adam Button at investinglive.com.