It’s finally here; in a few days, US citizens go to the poll to choose the next US president. Both parties are urging people to come out and vote. As record numbers are expected, both candidates are focused on swing seats to help them across the line. Of the 538 polls recently published, Trump is ahead by 1.4 points. Very slim. On company filings, Amazon surged 6.2%, fueled by growth in cloud and advertising, and Intel rose 7.8% on positive revenue and guidance. Microsoft (+1%) booked gains after earlier slumps in post-earnings, and Apple slipped 1.3% on lukewarm guidance, providing a mixed base in profits from the mega caps. The much-anticipated US Employment numbers came out on Friday. The U.S. jobs report showed only 12K jobs being added in October, far below expectations, the weaker data looks to be due to hurricane disruptions and a Boeing strike. Poor jobs growth plus mixed company earnings may prompt the Fed to adjust its monetary policy this coming Thursday. Official rates still stand at 5%, and the market is factoring in a 25 bpt reduction.  In the commodities markets oil is currently braced for Iran’s retaliation against recent Israeli missile strikes over the weekend. Ali Khomeini called on the “Axis of Resistance” made up of Hamas, Hezbollah, Houthis, and militant groups from Iraq and Syria to provide a “crushing” response to the attacks. Further, gold and silver move into correction mode, with traders questioning the extent of the pullback as just resting as a result of the recent trend or a significant top going in place for the metals. 

As Election Day draws near, the United States is on the cusp of choosing its next president in what promises to be one of the most consequential and closely watched elections in recent history. Both political parties are pushing hard to get citizens to the polls, especially in key swing states that could decide the outcome. With record voter turnout expected, both candidates—Vice President Kamala Harris and former President Donald Trump—are concentrating their efforts on these battleground regions, aiming to gain every possible advantage as the election approaches.

The most recent data from 538 polls show that Trump holds a narrow lead of 1.4 points, a margin so slim that it underscores just how divided the country is. This razor-thin lead has created uncertainty in the markets, which closely track the election given the potential policy shifts each candidate might bring. A Democratic win suggests the status quo more or less remains the same, with no major global shake-up expected. While a Republican wins, we expect US import tariffs to rise as Trump looks to “make America great again”. Although this is focused on all imports into the US, it is targeted on China but decisions will be made to foreign governments like Australia.  From tax reforms to regulatory changes, the outcome of this election is poised to impact everything from corporate profits to consumer spending, and investors are bracing for significant volatility in the days and weeks ahead, especially with how the mega-caps will report. 

Last week’s company earnings report for the meg-caps was mixed. Amazon surged by 6.2% driven by growth in its cloud computing and advertising divisions. Amazon Web Services (AWS) continues to expand, and with increasing demand for digital advertising, Amazon has solidified its position as a leader in these high-growth areas. Intel saw a notable rise of 7.8%, largely due to positive revenue growth and strong guidance for the coming quarter. Intel’s positive outlook has reassured investors about the tech giant’s ability to remain competitive in an increasingly crowded semiconductor market. Microsoft booked modest gains of 1%, recovering slightly from earlier slumps that followed mixed earnings results. The company’s strength in cloud services has been a bright spot, although some investors remain cautious due to increased competition. Apple slipped by 1.3% after providing lukewarm guidance. Despite strong demand for its products, Apple’s cautious outlook reflected concerns about potential supply chain disruptions and a possible softening of consumer demand. 

This softness in demand was echoed by the US employment data. The much-anticipated numbers for October were released, showing a disappointing addition of just 12,000 jobs—far below expectations. This weaker-than-expected growth in job creation has been partly attributed to disruptions from recent hurricanes and an ongoing strike at Boeing, which has affected production and employment in the aerospace industry.

The soft jobs report has raised concerns about the strength of the labor market recovery and could prompt the Federal Reserve to reconsider its monetary policy stance. Currently, the Fed’s official rate remains at 5%. Still, given the subdued job growth and mixed corporate earnings, market expectations have shifted toward a possible 25 basis point rate cut at the upcoming Fed meeting this Thursday. A rate cut could support the economy, though some analysts warn that further easing could fuel inflation.

The Fed's decision will be pivotal, especially with inflation remaining a concern. A rate cut could weaken the U.S. dollar, making American exports more competitive and raising import prices. For the stock market, a dovish Fed stance might provide a short-term boost to equities, particularly in interest-rate-sensitive sectors like real estate and utilities.

The US presidential elections on Tuesday are set to be the most closely watched event, capturing the attention of investors worldwide. In addition, markets will keep a keen eye on the Federal Reserve's interest rate decision and the ISM Services PMI, Michigan consumer sentiment, foreign trade data, factory orders, and non-farm productivity measures. Also, the earnings season will continue, with the focus shifting to large and mid-cap companies. Globally, key interest rate decisions from UK, Australia, Brazil, Poland, and Norway will be pivotal. Germany's industrial production, factory orders, and trade balance figures, along with manufacturing and services PMIs for Spain and Italy, and Euro Area retail sales, will provide insights into the health of the European economy. Meanwhile, in China, the National People's Congress, along with foreign trade data, Caixin Services PMI, and inflation metrics for consumers and producers, will dominate the headlines.

On the position front, we took a … loss on leveraged equity positions but still have a … position (ASX … and SP…). Oil continues to be volatile and we remain … Murmurings from Ali Khomeini about a retaliation strike from the Axis will support the commodity. We have exited gold and silver positions with … profit and wait for a re-entry opportunity. Wheat has returned after showing … profits, but we are still happy to … off for a longer time. We are … the AUDUSD.

Trade Focus:

Trade Oil

Fundamentals:

We have been in oil for a … time. Trading has been volatile; however, we still make out that whilst the unrest in the Middle East exists, this will … prices. Over the weekend, Iran responded to Israeli missile strikes with calls for retaliation, escalating the already volatile situation. Ali Khomeini, a prominent Iranian figure, has urged the so-called “Axis of Resistance,” which …

Technical Analysis:

We have seen a lift in Oil prices from … Good support remains at US…, whilst key resistance stands at US … A break of this level sets the trend back to US… 

Support              …

Resistance         …

Momentum        …