With the presidential election just two weeks away, a sense of uncertainty has settled over Wall Street, resulting in a mostly flat week for investors. Concerns over potential shifts in fiscal policies and potential trade disruptions due to tariffs are causing investors to take a cautious approach.
While the S&P 500 experienced three consecutive losing sessions, it managed to rebound slightly by the end of the week, buoyed by strong corporate earnings that underscore the resilience of American businesses. However, the rising Treasury yields indicate growing expectations that the next administration, regardless of the election outcome, may find it difficult to enact stricter fiscal measures. Adding to the cautious mood, the International Monetary Fund has raised concerns about the long-term trajectory of U.S. national debt.
The spotlight this week was undoubtedly on Tesla Inc., whose stock surged an impressive 21% on Thursday following the announcement of plans to launch more affordable models by the first half of 2025. This marked the stock’s biggest single-day gain since May 2013, reflecting investors’ renewed optimism in Tesla’s future growth and dominance in the electric vehicle sector.
Looking ahead, next week’s earnings reports from five of the tech giants, known as the Magnificent Seven – Alphabet Inc., Microsoft Corp., Meta Platforms Inc., Amazon.com Inc., and Apple Inc. – are highly anticipated. Additionally, the release of official October labor market statistics will provide crucial insights into the state of the US economy.
Beyond Tesla’s impressive performance, other notable developments in the business world include:
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Boeing’s Labor Dispute:
Machinists at Boeing Co. rejected a proposed 3.5% wage hike, extending their five-week strike. This ongoing labor dispute adds another layer of complexity to the company’s already challenging financial situation, with Boeing facing a $6 billion loss and significant cash burn as it attempts to resolve worker grievances.*
General Motors’ Strong Earnings:
General Motors Co. reported better-than-expected third-quarter earnings, exceeding forecasts for revenue and EPS. The company attributed its strong performance to robust consumer demand and raised its annual profit outlook, highlighting its continued growth momentum and financial resilience. Shares of General Motors rallied over 7% in response to the positive news.*
Robust Holiday Spending Forecast:
A recent Bank of America survey revealed that U.S. shoppers plan to spend $2,100 this holiday season, representing a 7% increase from 2023. This surge in spending indicates strong consumer confidence and bodes well for the retail sector, as evidenced by the positive performance of the SPDR S&P Retail ETF XRT. Historically, retail stocks tend to outperform after the holiday season.As the election approaches, investors are navigating a complex landscape of uncertainty and optimism. While the economic outlook remains strong, the potential impact of the upcoming election on fiscal policies and trade remains a key concern for investors.
