Beyond the Arches #37: Less than a week before election day, this is how markets react to the news at home and abroad. Invest in tech that follows the trends.

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With the consequential U.S. Presidential election only a few days away, analysts and economists are keeping a keen eye on the markets. As the two candidates make their closing arguments to American voters, a flurry of activity and reporting continues in the public markets. 

In recent weeks, the Dow, Nasdaq, and S&P have flirted with their highest numbers in years, riding on a wave of earnings reports, government report releases, global tensions, and domestic speculation about the next four years. The Dow recently declined following jobs data showing fewer job openings in September compared to previous months – a further sign of cooling in the labor market. Analysts will continue to watch these numbers as the Fed moves toward a second potential rate cut. Meanwhile, the Nasdaq and S&P, both closely tied to the tech sector, rose on expected earnings reports from the Magnificent Seven.

Oil prices came down to Earth after a tumultuous ride, cooling on the news that Israel’s retaliatory strike on Iran remained limited in scope, focusing on military sites instead of the oil-producing areas many feared could disrupt production and global pricing. 

Despite electoral and global uncertainties, the International Monetary Fund released its forecasts, outlining growth drivers. According to the World Economic Outlook report, the U.S. economy will continue to fuel global growth, with other global leaders like India and Brazil contributing to economic thrust. China, whose economy is experiencing ripples after years of growth, was forecasted below the trend of 4.5% expected growth.

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On Our Radar This Week

• The IDF carried out planned military strikes in Tehran in response to provocations and strikes from Iran. The “extensive but precise” operation focused (as promised) on Iran’s military targets, leaving out the nuclear and fuel-producing sites that global observers feared would expand the current conflict into a formal war. Three waves of strikes hit missile manufacturing sites, aerial defense assets, and other high-value military targets.
• This week Salome Zourabichvili, President of the Republic of Georgia, week refused to recognize the results of parliamentary elections, citing the interference by Russian interests and declaring the elections “victim to a Russian special operation.” The Central Election Commission claims the authoritarian-leaning Georgian Dream party received 54.8% of Saturday’s vote. Protests are underway across the small country, with thousands of Georgians and the broader diplomatic world calling for a swift investigation into alleged vote-buying, intimidation, and other operations intended to break down alliances with the EU and encourage Russian subordination. 
• NATO has confirmed the presence of North Korean soldiers in Russia’s Kursk region. The report comes as South Korea raised concerns over the Hermit Kingdom’s support of Russia in its military operations in Ukraine. The injection of over 10,000 North Korean troops comes as Russia continues to suffer material and troop losses in the years-long attempted annexation of Ukraine. Acknowledging the North Korean support after initial denials, Moscow declared that it would view U.S. and allied support of Ukraine’s deep strike planning as “direct involvement of NATO.”

Macro Bites

• The Quarter Pounder returned to McDonald’s menu after officials found no signs of E.coli. Despite one death and hundreds of illnesses, the company expects no long-term material fallout from the incident.  
• At the heart of the Boeing strike, an emotional fight over lost pension plans. Compensation is only one reason for the seven-week-long strike. Union members say the company coerced them to give up pensions in 2014 in favor of a 401(k), using off-shoring as leverage.
• Volkswagen seeks unprecedented plant closures, layoffs, and pay cuts. Europe’s largest automaker views the cuts as vital to survival after years of falling demand, rising interest, and continued economic uncertainty. 

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