OPENING CALL
Stock futures were drifting on Monday as Treasury yields fell and the dollar weakened, pointing to a leveling out of positions ahead of Tuesday's presidential vote.
"Investors expecting a Trump victory have been buying dollars and selling Treasurys. Now that's reversing, with people trying to make sure their portfolios aren't too skewed in one way or another," Pictet Asset Management said.
Away from the election, traders await Thursday's Federal Reserve decision on interest rates.
Premarket Movers
Apple fell 0.7% after it was revealed that Berkshire Hathaway had sold 100 million of its shares.
Berkshire Hathaway shares were down 0.3% after third-quarter after-tax operating earnings fell 6%.
Boeing shares rose 0.4% ahead of a vote on Monday by striking machinists on a new contract offer.
Nvidia rose 2.2% after it was announced it would replace Intel on the Dow Jones Industrial Average.
Sherwin-Williams rose 4.5% following the news that it will be added to the DJIA in place of Dow Inc, whose shares fell 1.5%.
Shares of Trump Media & Technology Group were down 6.1% with election polls remaining tight.
Talen Energy was down 14% after regulators rejected an amended interconnection service agreement in Pennsylvania for an Amazon data center with a nuclear power plant run by the power producer.
Viking Therapeutics rose 23% after a clinical trial of its experimental oral weight-loss pill showed promising results.
Postmarket Movers
Nuwellis reported higher margins and lower operating costs in its preliminary third-quarter results. Shares rose 65%.
Watch For:
Factory Orders for September; earnings from Palantir Technologies, Vertex Pharmaceuticals, Constellation Energy, Zoetis, NXP Semiconductors, Marriott International, Diamondback Energy, BioNTech, Wynn Resorts, and Illumina
Today's Top Headlines/Must Reads:
-Why $11 Trillion in Assets Isn't Enough for BlackRock's Larry Fink
-Election Day Is Here for Elon Musk-Who Isn't on the Ballot
-China Isn't Planning a 'Bazooka' Stimulus-at Least Not This Year
-Chinese Logistics Operators Are Getting Into U.S. Warehousing
MARKET WRAPS
Forex:
The dollar fell as the presidential election and the Fed loom large.
"[The] U.S. dollar shrugs off poor nonfarm payrolls, but suffers from election polls," Commerzbank Research said.
A well-respected poll put Kamala Harris ahead of Donald Trump in Iowa.
Friday's jobs data were well below forecasts, hit by one-off weather events and strikes.
The BOE's staff assessment of the new Labour government's budget could support sterling slightly, Monex said.
The assessment will likely hint that the higher spending planned in the budget will require a "marginally slower" pace of interest-rate cuts.
This should be positive for sterling, albeit at the margin.
The Turkish lira steadied against the dollar after S&P upgraded Turkey's credit rating to BB- from B+ with a stable outlook and praised the central bank's tight grip on monetary policy.
Bonds:
10-year Treasury and Bund yields were lower and Pepperstone said there was some more room for final positioning ahead of the presidential election.
"Some further hedging, de-risking, and position squaring could well be seen as election day looms large."
In the Treasury market, Monday's $58 billion 3-year note auction could be of interest, particularly after last week's 2- and 5-year sales both notched sizeable tails, Pepperstone added.
Commerzbank Research said volatility in bond markets remains assured with the election showdown and impending rates decisions.
"After last week's memorable spread and curve moves, markets are set to remain jittery while yearning for the U.S. election results."
Energy:
Oil prices gained more than 2% after OPEC and its allies pushed back a planned production increase by a month, signaling caution amid growing concerns about weaker global demand and lower prices.
A group of eight OPEC+ members led by Saudi Arabia and Russia extended voluntary production cuts of 2.2 million barrels a day until the end of December, according to a statement from the group over the weekend.
The planned production increase-originally set to gradually start in October 2024 and run through September 2025-had already been delayed by two months in September.
ING said it expects the market to still be in surplus unless OPEC and its allies continue to extend production cuts through next year.
"While the delay does not change fundamentals significantly, it does potentially leave the market having to rethink the strategy of OPEC+," ING said.
"This delayed supply increase means that maybe the group is more willing to support prices than many believe."
DNB Markets said the OPEC+ decision indicates the group isn't comfortable with oil prices in the low $70s.
"It is quite striking that OPEC+ continues to delay the scheduled production increases, at the same time as OPEC's oil market report insists that oil market is deeply undersupplied."
"We have argued all year that OPEC's oil market balance is out of sync with reality."
The cartel forecasts global demand to grow by 1.93 million barrels a day this year and 1.64 million barrels a day the next.
Metals:
Gold edged lower as investors take a cautious approach ahead of this week's major events.
Futures are still up nearly 3% on the month and more than 30% year-to-date, with uncertainty around the election outcome stoking demand for the safe-haven asset in recent days, ANZ said.
Meanwhile, traders expect the Fed to cut rates by 25 basis points, making gold more appealing.
"While long term drivers for gold remain in place, a pause or shallow rate cuts will provide reason for investors to book profit after the recent price rally."
RHB Retail Research said gold appears to be extending its consolidation phase , based on the daily chart, and keeps its positive trading bias for the precious metal, with the nearest resistance at $2,800/oz.
TODAY'S TOP HEADLINES
Southwest, Other Airlines Plan a Shake-Up. Why They Need More to Boost Their Stocks.
Budget airlines are hoping a big shift in how they assign seating will win over a broader passenger base, in a desperate bid to give their shares a much-needed lift.
Low-fare carriers have struggled to keep pace with legacy rivals' aggressive discounting, and their costs have crept up after agreeing to hefty pay increases for pilots and cabin crew members.
Boeing Had a Big Week. This One Is Even Bigger.
Boeing simply needs to put the costly strike behind it.
It could happen on Monday, when tens of thousands of striking Boeing employees in the Pacific Northwest will vote on a tentative labor agreement reached on Oct. 31 that could raise wages by more than 40%, compounded, over four years.
Fed Prepares Rate Cut Amid Economic Contradictions
Federal Reserve officials are expected to cut interest rates by a quarter percentage point at their meeting Thursday because inflation has continued to make progress toward their 2% goal.
Officials began lowering rates at their previous meeting in September by making a larger half-point cut. They are trying to figure out where, exactly, rates should settle after high inflation over the past three years led to a dramatic series of rate increases.
Whether 7-Eleven Is Bought or Not, Convenience-Store Consolidation Looms
The second-largest convenience-store owner in the U.S. wants to buy the largest. Whether or not the deal goes through, there will likely be many convenience-store mergers in the years ahead.
The industry is so fragmented in the U.S. that the 10 largest chains still hold less than a fifth of market share. In recent years, consolidation has been slow and steady, but that could be set to change.
The Mysterious Fees Inflating Your Grocery Bill
The price of a bag of coconut-cashew granola at Whole Foods jumped last year from $5.99 to $6.69. Why that happened defies simple explanation.
The granola maker, Wildway Foods, said the cost of making the cereal hasn't gone up that much, and that it isn't pocketing more profit. It jacked up the price, it said, in large part to offset fees that piled up from a little-known link in the supply chain: grocery distributors. There were charges for processing grocery promotions, others for potential spoilage and still more related to alleged shipping glitches.
Iran Tells Region 'Strong and Complex' Attack Coming on Israel
Amid U.S. warnings against a counterattack on Israel, Iran is sending a defiant diplomatic message: It is planning a complex response involving even more powerful warheads and other weapons, said Iranian and Arab officials briefed on the plans.
It remains to be seen whether the Iranian threats are real or just tough talk. Israel's punishing airstrike against Iran on Oct. 26 shredded the country's strategic air defenses, leaving it badly exposed and sharply raising the risks to Iran if it follows through.
Write to gareth.mcpherson@wsj.com TODAY IN CANADA
Earnings:
5N Plus 3Q
Altius Renewable Royalties 3Q
Brookfield Asset Management 3Q
Cargojet 3Q
Coveo Solutions 2Q
Dream Impact Trust 3Q
Sun Life Financial 3Q
Topaz Energy 3Q
Toromont Industries 3Q
Economic Indicators (ET):
Nothing major sheduled.
Stocks to Watch:
None.
Expected Major Events for Monday
08:45/ITA: Oct Italy Manufacturing PMI
08:50/FRA: Oct France Manufacturing PMI
08:55/GER: Oct Germany Manufacturing PMI
15:00/US: Sep Manufacturers' Shipments, Inventories & Orders (M3)
15:00/US: Oct Employment Trends Index
16:00/US: Oct Global Manufacturing PMI
23:50/JPN: Oct Monetary Base
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
Aclaris Therapeutics Inc (ACRS) is expected to report $-0.01 for 3Q.
Actinium Pharmaceuticals Inc (ATNM) is expected to report $-0.34 for 3Q.
Affiliated Managers Group Inc (AMG) is expected to report $3.74 for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
11-04-24 0633ET