S&P 500 Faces Election Jitters

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💰S&P 500 Faces Election Jitters

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The S&P 500 wobbled as investors braced for election-day drama, with rising Treasury yields and shaky earnings adding to the suspense. Markets are on edge, unsure whether they’re about to celebrate or panic, as potential policy twists could swing stocks wildly.

Let’s go.

BIG IDEA 1💡
Earnings Highlights and Economic Signals

Market Performance

• Small Dip for Indices: The S&P 500 edged down 0.04%, Dow Jones slipped 7 points (-0.02%), and Nasdaq gained 0.2%.

• GM Surges on Strong Results: General Motors (GM) stock soared 10%, driven by robust revenue and profitability.

• Verizon Disappoints: Verizon (VZ) stock tumbled 5% as mixed results showed earnings beat but revenue fell short.

Tesla Leads the Earnings Reports

• Tesla Earnings Watch: Tesla (TSLA) leads Wednesday’s earnings, with focus on margins and EV performance.

• Big Names Reporting Soon: AT&T, IBM, Bank of America, and Coca-Cola will also reveal results this week.

• Strong Earnings Season So Far: 70% of reporting S&P 500 companies have exceeded forecasts—per FactSet.

IMF Boosts U.S. Growth Forecast

• Optimistic GDP Forecast: IMF raised U.S. GDP projections for 2024 to 2.8%, driven by consumer spending.

• Wells Fargo Warns of Volatility: Analysts foresee a potential "sell-the-news" market reaction after the election.

• Yields Keep Climbing: The 10-year Treasury yield increased by 2 basis points to 4.21%, adding pressure on stocks.

BIG IDEA 2💡
Emerging Risks and Sector Shifts

Crypto Volatility as Bitcoin Retreats

• Bitcoin Pulls Back: Bitcoin fell 1.8%, retreating from recent highs due to election uncertainty.

• Prediction Markets Lean Trump: Trump has a 63.7% chance of winning, influencing market sentiment.

• Institutional Bitcoin Interest Surges: CME futures open interest hit a record $12.26 billion, reflecting rising investor activity.

Treasury Yields and Interest Rate Impact on Crypto

• Rising Yields Weigh on Crypto: Treasury yields are pushing speculative assets like Bitcoin lower.

• Stronger Dollar Hurts Sentiment: Bitcoin faces headwinds as the dollar strengthens near 3-month highs.

• Fed Rate Decisions in Focus: Traders are watching for post-election Fed actions that could shape Bitcoin’s outlook.

Middle East Tensions Keep Markets on Edge

• Middle East Conflicts Persist: Efforts to broker a ceasefire in the Israel-Gaza conflict remain stalled.

• Crude Inventories Rise: U.S. crude inventories increased by 1.64 million barrels, keeping markets in check.

• Distillate Stockpiles Drop: Falling gasoline and distillate stocks hint at rising fuel consumption.

Gold Shines Amid Market Uncertainty

• Gold Hits Record Highs: Investors are turning to gold as election risks loom large.

• Hedging Against Volatility: Gold demand is up as traders prepare for potential election-related turbulence.

• Fed Moves Will Impact Prices: Gold prices will stay elevated if the Fed delays interest rate cuts post-election.

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INFLATION REPORT💸
Today’s Inflation Rate: 2.25% 🙃

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