A daily market update from FS Insight — what you need to know ahead of opening bell
“Responsibility is a unique concept… You may share it with others, but your portion is not diminished. You may delegate it, but it is still with you … If responsibility is rightfully yours, no evasion, or ignorance or passing the blame can shift the burden to someone else.” – Admiral Hyman Rickover
Overnight
Wall Street’s election trades now face the moment of truth BBG
Russia suspected of plotting to send incendiary devices on U.S.-bound planes WSJ
Boeing factory strike ends as workers vote to accept contract AP
Spain rescuers search underground parking as fresh flooding hits Barcelona BBC
Solid-state batteries may yet catch up — but silicon anodes are winning the race to power EVs CNBC
Bangladesh steps up repayments to Adani to avoid power supply cut BBC
Report finds that US CEOs were fired more quickly this year over low stock prices RT
Germany’s government is on the brink of collapse — here’s what could happen now CNBC
Texas state oil regulator requests $100 million to tackle West Texas well blowouts AP
U.S. chip toolmakers move to cut China from supply chains WSJ
Australian federal police raid PwC’s Sydney headquarters amid tax leaks scandal TG
Meta extends ban on new political ads past Election Day CNBC
Talen, Constellation and Vistra tumble after government rejects Amazon nuclear-data center agreement CNBC
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| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 11/5 | 9:45 AM | Oct F S&P Srvcs PMI | 55.3 | 55.3 |
| 11/5 | 10:00 AM | Oct ISM Srvcs PMI | 53.8 | 54.9 |
| 11/7 | 8:30 AM | 3Q P Nonfarm Productivity | 2.5 | 2.5 |
| 11/7 | 8:30 AM | 3Q P Unit Labor Costs | 1 | 0.4 |
| 11/7 | 2:00 PM | Nov 7 FOMC Decision | 4.75 | 5 |
| 11/8 | 10:00 AM | Nov P UMich 1yr Inf Exp | 2.7 | 2.7 |
| 11/8 | 10:00 AM | Nov P UMich Sentiment | 71 | 70.5 |
MORNING INSIGHT
Good morning!
As Election Day begins, it is still a “coin toss” coming down to two factors: the senior women vote and overall turnout. Nate Silver’s model shows that it comes down to Pennsylvania.
Click HERE for more.
TECHNICAL
- SPX pullback arguably should stabilize post Election and turn to temporary new all-time highs.
- Software ETF (IGV) is breaking out of five-year downtrends vs. SOXX this week.
- WTI Crude oil is likely to turn back to new lows following a fractional bounce.
Click HERE for more.
CRYPTO
- While regulatory conditions are set to improve regardless of the Presidential outcome, we anticipate a sharp binary reaction to the results: higher on a Trump win and lower on a Harris win.
- Macro factors will eventually retake the reins, with elements such as a dovish Fed, the end of QT, potential debt ceiling issues, and expanding fiscal deficits supporting higher crypto prices in the medium term.
Click HERE for more.
First News
The U.S.-China rivalry has featured prominently in news cycles before and during this election season. Last week, Bloomberg News published an analysis suggesting that the various U.S. efforts to impede China’s progress in technologies and industries deemed to be strategically important are not having their intended effect – at least, not sufficiently so.
China’s Xi Jinping in 2015 announced that his country would seek to become the global leader in 13 key technologies – commercial aircraft, semiconductors, artificial intelligence, robots, machine tools, large tractors, drugs, liquid natural gas carriers, electric vehicles/lithium batteries, high speed rail, graphene, solar panels, and drones (unmanned aerial vehicles).
The analysis found that despite the various tariffs and embargoes implemented since 2018 by both the Trump and Biden administrations, and by U.S. allies, China has advanced in all 13, becoming the global market leader in two (high-speed rail and electric vehicles/lithium batteries) and maintaining its pre-existing leadership in three (graphene, solar panels, and drones). Bloomberg further warns that China is on pace to also become the global leader in LNG carriers by 2030.
It’s not just a Bloomberg point of view. General B. Chance Saltzman of the U.S. Space Force last week warned that China’s space-based military capabilities are advancing at a “mind-boggling” pace. “The number of different categories of space weapons that [China has] created and . . . the speed with which they’re doing it is very threatening,” he said during meetings in Europe with allies and prospective partners.
One could argue that China’s success in advancing its technological capabilities is unsurprising. China has long been ramping up funding for China’s STEM researchers, long before Xi rose to power. The country’s research output – as measured by the number of papers published, began growing at a staggering pace in the early 2000s. At first, this trend was largely dismissed, as quality tended to be lacking in these papers – often either duplicating previous research done in the West or containing fudged or even outright fabricated data.
That has largely changed. As judged by their peers around the world, Chinese scientists are increasingly publishing quality work – papers that hold up to peer review and end up being cited in the work of others. In fact, when examining the top 1% of most-cited research papers in the world, China accounted for a greater share than the U.S. from 2018-2020 (27.2% versus 24.9%, respectively). That research is also regarded as increasingly creative and innovative. It is worth noting, however, that China’s problem with quantity over quality has not entirely been solved: when looking at what percentage of each country’s published research ends up being widely cited (and thus, viewed as high-quality work), the U.S. still holds the lead. Nevertheless, reversing the apparently declining interest in U.S. government funding of pure scientific research could help to expand it while ultimately also helping U.S. technologies advance. BBG, FT