Stocks Rise as Traders Map Out Election Game Plan: Markets Wrap

(Bloomberg) — Stocks rose at the start of the busiest week for corporate earnings, with traders also gearing up for the US election and key economic data that will set the stage for the next Federal Reserve decision. 

All major groups in the S&P 500 advanced, with the exception of energy shares that joined a plunge in oil. Airlines rallied. Shares of cryptocurrency companies surged, with Bitcoin extending its October gains. Trump Media & Technology Group Corp. soared alongside the implied odds in betting markets like PolyMarket of Former President Donald Trump returning to the White House.

A victory for Trump would be more beneficial for stocks and Bitcoin relative to his Democratic opponent, while a Kamala Harris presidency would bring slightly more relief to housing costs, according to a Bloomberg Markets Live Pulse survey. Some 38% of the 350 respondents see equities accelerating a year from now under the Republican candidate, versus 13% under the Democrat.

“Markets have been extremely active over the past month as traders have juiced up the already ebullient scenario baked into equity valuations, adding improved odds of a Republican sweep to the list of goodies discounted,” said Lisa Shalett at Morgan Stanley Wealth Management.

A week before Fed gathers to reflect on the appropriate tempo of rates cuts, data is set to show underlying resilience in the US economy and a temporary hiccup in jobs growth. Investors are also awaiting results from firms accounting for nearly 42% of the S&P 500’s market capitalization, including several big techs like as Apple Inc., Microsoft Corp. and Meta Platforms Inc.

“This week’s megacap tech earnings and jobs data will provide plenty of potential fuel for near-term market momentum, but it remains to be seen whether investors will want to sit on their hands until after next week’s election, especially given the volatility around the past two,” said Chris Larkin at E*Trade from Morgan Stanley.

The S&P 500 rose 0.4%. The Nasdaq 100 added 0.3%. The Dow Jones Industrial Average gained 0.7%. The Russell 2000 of small caps climbed 1.6%.

Bitcoin climbed 1.3%. The yen dropped as much as 1% before paring losses as investors mulled the implications of the Liberal Democratic Party and its coalition partner losing their majority. Treasury 10-year yields advanced four basis points to 4.28%.

Key events this week:

• US job openings, Conference Board consumer confidence, Tuesday
• Alphabet earnings, Tuesday
• Eurozone consumer confidence, GDP, Wednesday
• US GDP, ADP employment, pending home sales, Wednesday
• Meta Platforms, Microsoft earnings, Wednesday
• US Treasury Department holds quarterly refunding announcement of bond-auction plans, Wednesday
• China Manufacturing and non-manufacturing PMI, Thursday
• Bank of Japan rate decision, Thursday
• Eurozone CPI, unemployment, Thursday
• US personal income, spending and PCE inflation data, initial jobless claims, Thursday
• Amazon, Apple earnings, Thursday
• China Caixin manufacturing PMI, Friday
• US employment, ISM manufacturing, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 11:40 a.m. New York time
• The Nasdaq 100 rose 0.3%
• The Dow Jones Industrial Average rose 0.7%
• The Stoxx Europe 600 rose 0.5%
• The MSCI World Index rose 0.4%
• Bloomberg Magnificent 7 Total Return Index rose 0.5%
• The Russell 2000 Index rose 1.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.2% to $1.0816
• The British pound rose 0.2% to $1.2992
• The Japanese yen fell 0.5% to 153.10 per dollar

Cryptocurrencies

• Bitcoin rose 1.3% to $68,538.48
• Ether rose 0.7% to $2,507.35

Bonds

• The yield on 10-year Treasuries advanced four basis points to 4.28%
• Germany’s 10-year yield declined two basis points to 2.27%
• Britain’s 10-year yield was little changed at 4.24%

Commodities

• West Texas Intermediate crude fell 5.7% to $67.70 a barrel
• Spot gold fell 0.3% to $2,740.53 an ounce

This story was produced with the assistance of Bloomberg Automation.

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