The Day at a Glance | November 5 2024

The Top

• The latest polls suggest that Donald Trump could return as the next president of the United States, although he might face a divided Congress. 

• Later today, the ISM Services Index will be published, and is expected to set at 53.5, slowing down from the 54.9 observed in the prior month but still signaling the sector’s dynamism.

• Workers at Boeing’s West Coast plant in the US accepted a new contract offer on Monday, ending a seven-week strike that halted most airplane production and deepened the financial crisis for the aircraft manufacturer.

• According to Reuters, the Bank of England will likely cut interest rates to 4.75% this Thursday; however, next year, public spending is expected to provide the economy with a boost in growth and inflation, complicating the central bank’s actions.

• Makoto Sakurai, former member of the Bank of Japan, stated that the central bank is likely to raise interest rates in the coming months, with January seen as the most suitable timing, as political and market events will be clearer.

• Oil prices held steady on Tuesday ahead of what is expected to be an exceptionally close US presidential election, following a more than 2% rise in the previous session after OPEC+ delayed plans to increase production in December.

Economic Environment

The latest polls suggest that Donald Trump could return as the next president of the United States, although he might face a divided Congress. Today marks the end of the US general elections; however, as we have previously mentioned, the decisive factor is the electoral votes awarded by each state. According to today’s polls, Republican candidate Donald Trump could win the following swing states: Arizona (+2.8 pp vs. Harris), Nevada (+0.6 pp), Pennsylvania (+0.4 pp), North Carolina (+1.2 pp), and Georgia (+1.3 pp). With this context, Democratic candidate Kamala Harris holds an advantage in Wisconsin (+0.4 pp vs. Trump) and Michigan (+0.5 pp). Thus, Donald Trump could secure more than the 270 electoral votes needed to be declared the winner, according to Real Clear Politics polling.Regarding Congress, some political analysts and polling firms believe the Senate could lean red, while the House might be divided, although a slight Democratic majority is expected. Additionally, in a scenario where Republicans could win the House, it would likely be by a narrow margin, leaving uncertainty over the executive’s ability to pass all its initiatives.

Markets and Companies

Futures for major US stock indices are trading higher as the market closely watches the start of US elections, with a tight race expected between both presidential candidates. In addition to the presidential race, the composition of Congress will offer signals on what fiscal policy could look like under the new administration. Greater volatility may arise in the days following the election, depending on how close the results are and the time taken to count votes. Regarding economic matters, the Federal Reserve will announce its monetary policy decision on Thursday; the market expects a 25-basis-point reduction in the benchmark rate. 

In commodities, oil is posting slight gains after OPEC announced it would delay plans to increase production. Gold is maintaining its upward trend and is priced at $2,742 per ounce. 

Treasury yields are rising, with the 2-year bond trading at 4.19% and the 10-year bond at 4.32%. Besides the presidential race, the market is also awaiting the Federal Reserve’s monetary policy decision on Thursday and its subsequent statement. 

In Mexico, IPyC futures are trading higher. The peso-dollar exchange rate stands at 20.12, up from yesterday’s 20.09 rate at market close. 

Alpek announced it has decided to suspend EPS production at its Beaver Valley facility in Monaca, Pennsylvania, by January 2025. This facility has a nominal installed capacity of 123,000 tons of EPS, representing less than 2% of Alpek’s total assets. The company will transfer most of its EPS production to other facilities.

Corporate News

• Palantir shares were up nearly 14% pre-market after reporting quarterly results that exceeded expectations, driven by increased demand due to developments in artificial intelligence. 

• Wynn Resorts reported results below consensus estimates.