😃 What to expect this week

Good morning investors! This is going to be a busy week so let’s get started.

Today we cover:

• New job report

• What to look forward to this week

• More earnings are coming

📊 Economy and News 

October Jobs Report: Weak Growth and Mixed Signals Ahead of Election

According to Friday's data from the Bureau of Labor Statistics, the US economy added a mere 12,000 jobs in October. If this preliminary figure stands, it marks the smallest monthly job gain since December 2020, when the economy lost 243,000 jobs amid the height of the pandemic. This October total fell considerably short of September's revised gain of 223,000 jobs and missed the anticipated addition of 112,500 jobs.

Economists had previously cautioned that several recent factors would likely skew the data, complicating any straightforward assessment of the labor market's real condition. On Friday, the BLS acknowledged these challenges, citing a shortened data-gathering period and the impact of weather-affected areas that hindered data collection.

Amid these uncertainties in the payroll figures, the unemployment rate—based on a separate survey that excludes weather-affected workers from its count—offered a hint of steadiness, remaining unchanged at 4.1%.

The big miss on the October jobs report put bets on the Federal Reserve rate cuts in the upcoming two meetings firmly back on the table.

Global hits:

• Dollar rebounds after weak jobs data; traders eye US election.

• Argentina cuts interest rate to 35% as inflation outlook eases.

• China eases rules for foreign investment in listed companies.

Shocking: TGI Fridays files for bankruptcy. On the other hand, Wendy's announces plans to close 140 restaurants.

We asked a similar question on Sunday and opinions were divided with 60% expecting the market to go up if Trump wins.

📈 Stocks

S&P 500 5,728.80 (+0.41%)
DJIA 42,052.19 (+0.69%)
NASDAQ 18,239.92 (+0.80%)
BRENT CRUDE 73.21 (-0.01%)
* Prices as of Nov 3rd, 12:20 AM UTC

What to Expect this Week

This week promises high tension for investors as the U.S. presidential election and key financial policy events approach, likely influencing markets.

U.S. Presidential Election

On Tuesday, Americans cast their votes in a close election, pitting Republican Donald Trump against Democrat Kamala Harris. While recent increases in Treasury yields and the dollar suggest some market expectations for a Trump victory, polls indicate a tight race. The main hope among investors is for a decisive outcome, as a contested election could bring prolonged uncertainty and market volatility.

Federal Reserve Meeting

The Federal Reserve is expected to announce a 25-basis point rate cut on Thursday, with an additional cut potentially in December. October’s job report, showing weakened growth, has reinforced expectations of a more cautious rate reduction. Investors will closely watch Fed Chair Jerome Powell's remarks for any signs of adjustments to the rate cut pace.

Earnings Season

Third-quarter earnings reports continue, though the election and Fed meeting may overshadow results. Notable reports include Palantir, Constellation Energy, and Qualcomm, with attention on updates from Arm Holdings and Super Micro Computer.

Bank of England and Global Central Banks

The Bank of England is likely to lower rates by 25 basis points on Thursday, following recent government spending plans that have raised borrowing costs. Meanwhile, the Reserve Bank of Australia is expected to hold rates steady, with inflation and economic strength justifying caution.

Oil Prices

Oil markets remain volatile as geopolitical tensions, including possible Iranian retaliation against Israel, add a risk premium. OPEC+ may delay production increases due to concerns over weak demand, with a decision potentially announced this week. Brent and U.S. crude prices dipped last week amid record U.S. output.

Investors will be tracking these events for signals on fiscal policy, economic resilience, and market stability in the weeks ahead.

Surprising: Intel will lose its spot in the Dow Jones Industrial Average after a 25-year run to Nvidia. Intel’s shares (INTC) have declined 54% this year, making it the worst performer on the index and leaving it with the lowest stock price on the price-weighted Dow.

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💵 Personal Finance

Investing in commodities

Commodities are real assets that can prove to be good for investors interested in short-term investments. These typically include natural resources, such as oil, agricultural products, natural gas, and precious metals.

Commodities are considered a good option as they provide protection against inflation.

Prices of commodities depend on demand and supply and they’re not linked to public equity markets. However, let us be clear that investing in commodities doesn’t mean buying and keeping a ton of rice or barrels of oil.

You can trade futures, turn to ETFs, or try stocks of commodities producers. However, in some cases, such as precious metals, it may be more suitable to own physical commodities.

These investments do not always offer very high returns, however, they are considered secure. But, prices of some commodities, such as rice and natural gas, can be highly volatile.

Check this video for more on the commodity market:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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