Investors are largely in stasis, bracing for volatility in what could be a politically historic week for America. All polls show a tight presidential race and Wednesday morning may not bring a clear victory for either candidate. The results could be contested for days or weeks, uncertainty that could rattle the markets further. In 2020, it took four days to officially declare Joe Biden the winner, and according to Bloomberg, trading volume hit a six-month high on that day.
The so-called Trump trade - long dollar, short bonds - will be particuarly sensitive to polling data throughout the night on Tuesday. If polling points to a Harris win, traders will be unwinding those positions throughout the night, and vice versa in a Trump win.
The Volatility Index (the VIX) saw extreme volatility in the week leading up to election day in 2020, surpassing 40 five days before voting day. Currently, the VIX is around 22.
Outside of the election, there is a Federal Reserve meeting on Thursday, November 7, during which the Fed will decide whether to cut interest rates for a second time this year. When the Fed cut interest rates by 50 basis points in their September meeting, the Dow Jones dropped 0.25%, and the S&P dropped 0.29%, after an inital but short-lived jump, according to Fortune.
There are some significant earnings announcements this week, including: Monday Nov 4: PLTR, ZTS, VRTX, FANG, O and BRK.B and BRK.A
Tuesday Nov 5: APO, EMR, CPNG, SMCI, IT, RDY, YUM, EXAS
Wednesday Nov 6: NVO, MELI, APP, QCOM, TM, ARM, GILD
Thursday Nov 7: EOG, DUK, ABNB, PBR, SQ, MNST
Friday Nov 8: SONY, NRG, PARA, ERJ
Nvidia is replacing Intel in the Dow Jones Industrial Average.
Oil is up after inflammatory Iran commentary toward Israel and OPEC agreeing to push back its December production increase by one month.
Image sources: Bloomberg and Webull
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