ELECTION DAY

As the much-anticipated Election Day unfolds, it is worth remarking that historical patterns indicate that the stock market tends to fare well amidst the fervor. Over the past 40 years, the S&P 500 has risen on 8 out of 10 election days, and while there have been some dips in November election months, the overall trend shows an average 10.68% increase in the year following elections since 1960. Market experts suggest that election outcomes may lead to short-term fluctuations but long-term trends are usually favorable, with split-party governments often seen as ideal for stock performance. Thus, regardless of who wins, the stock market tends to grow as companies continue to innovate and drive earnings growth. Ultimately, while elections can bring about market uncertainties, the underlying driver of stock market success remains consistent – the productivity and innovation of companies.

RESILIENCE EXPECTED

Cryptocurrency market has been experiencing a surge this morning with Bitcoin rising close to the $69,000 mark, while Ether and Solana’s token also saw gains, along with memecoins like dogecoin and Shiba Inu coin. As for the election outcome, analysts believe that just like for the stock market, regardless of who wins, bitcoin will remain resilient, and this could be due to factors like U.S. fiscal policies and monetary expansion driving demand for hard assets. In addition, the success of bitcoin ETFs, which have seen significant inflows this year, may contribute to the cryptocurrency’s growth. Moreover, some experts predict that bitcoin could reach $200,000 by 2025, although a Harris victory could lead to short-term declines, and the broader crypto market faces uncertainties depending on future regulatory decisions. Furthermore, it is worth highlighting that although there were initial concerns, there is growing consensus that a Harris presidency may not be as damaging to the cryptocurrency industry as previously thought, particularly if there is bipartisan support for crypto regulations and a crypto-friendly SEC.

RECORD TRADE DEFICIT

In September, the U.S. trade deficit surged to a 30-month high of $84.4 billion, a 19.2% increase from the previous month, largely driven by a spike in imports. Businesses rushed to bring in foreign goods, particularly consumer electronics, ahead of a potential port strike, which was avoided after three days. However, while the trade gap is expected to shrink in the near future, its expansion negatively impacted GDP growth during the third quarter, leading to a decrease to a 2.8% annual pace from the prior quarter’s 3.0%. Moreover, imports hit a record high of $352.3 billion, indicating strong consumer spending power, while exports declined by 1.2% due to decreases in passenger planes, drugs, and oil shipments. Nonetheless, despite the setback, the steady performance of exports and robust import figures suggest that consumer spending remains resilient and the economy is positioned for continued strength moving forward.

SKYROCKETING SUCCESS

The data analytics software company, Palantir, released a robust third-quarter results as it reported earnings per share of 10 cents, exceeding the projected 9 cents, and revenue of $726 million, which was higher than the anticipated $701 million. CEO Alex Karp attributed this success to the growing demand for artificial intelligence within the U.S. government customer base, and although it has been facing challenges in international commercial revenue due to issues in Europe and reduced funds from a government customer in the Middle East, the company remains optimistic about the future. In fact, Palantir expects fourth-quarter revenue to range between $767 million to $771 million and has raised its revenue forecast for 2024 to $2.805 billion to $2.809 billion, indicating a 26% growth rate. In addition, Palantir aims to achieve adjusted operating income of $1.054 billion to $1.058 billion for the year. Moreover, it is worth remarking that the recent strong performance has propelled Palantir’s shares in 2024, surpassing the Nasdaq’s growth, and its shares have rose by over 16% as of 8:00 AM CST.

CONCERNS OVER ACCURACY

Super Micro Computer (SMCI) is facing significant challenges as its accounting firm, Ernst & Young, resigned citing concerns about the accuracy of the company’s financial statements. This abrupt departure has raised red flags about the company’s governance and management practices. Following the resignation, investment firm Needham suspended its rating on SMCI, while Argus downgraded the company due to ongoing investigations and reports of financial irregularities. Additionally, Nvidia, a major customer of SMCI, has shifted some orders to other suppliers, further impacting Super Micro’s revenue. As a result, analysts have lowered price targets on SMCI and express skepticism about its ability to restore compliance. The company’s stock value has dropped substantially in response to these developments, and investors are wary of the potential implications. Super Micro now faces a challenging road ahead as it grapples with not only financial concerns but also the need to regain trust and stability in the market.