Wall Street week ahead: All eyes on US presidential election, Federal Reserve rate decision

As Wall Street is bracing for the US presidential election on Tuesday (November 5), market participants will keenly watch its outcome and the Federal Reserve’s monetary policy decision in the week ahead.

According to several reports, Democrat candidate & US Vice President Kamala Harris and Republican opponent & former president Donald Trump are in a tight presidential race for the White House.

Next week, the presidential election will be followed by the US central bank’s monetary policy committee (MPC) two-day meeting, starting on Wednesday.

Fed policymakers, led by Chair Jerome Powell, will announce their decision on Thursday.

In September, the Fed kicked off its rate-cutting campaign with a cut of half a percentage point.

It is widely expected that the Fed will cut its interest rate for a second time this year as the inflation continues to ease.

Several economists have predicted a rate cut by a quarter-point, to about 4.6 per cent.

On Thursday, the Fed policy decision will be followed by Powell’s press conference.

The earnings calendar next week will see some big companies such as Palantir Technologies, Yum! Brands, and Qualcomm declaring their third quarter results.

Economic events

On November 4 (Monday), data on factory orders for September will be released.

On November 5 (Tuesday), data on US trade deficit for September and ISM services for October will be declared.

November 6 (Wednesday) will see the S&P final US services PMI numbers for October.

On November 7 (Thursday), Federal Open Market Committee (FOMC) will announce its decision on interest rates and Fed Chair Jerome Powell will hold a press conference.

Data on consumer credit for September and US productivity (preliminary) for third quarter will also be released on the same day.

November 8 (Friday) will see a report on consumer sentiment (preliminary) for November.

Earnings

Following companies are due to report third quarter earnings in the week ahead — Vertex Pharmaceuticals, Palantir Technologies, Constellation Energy, Zoetis, Marriott International, American International Group, Diamondback Energy, Illumina, Ferrari, Apollo Global Management, Emerson Electric, Marathon Petroleum, Cummins, Microchip Technology, Yum! Brands, DuPont de Nemours, Restaurant Brands International, Archer-Daniels-Midland, Novo Nordisk, Toyota Motor, Qualcomm, Arm Holdings, Gilead Sciences, MercadoLibre, CVS Health, McKesson, Williams Companies, Sempra, Johnson Controls International, Corteva, Take-Two Interactive Software, Arista Networks, Duke Energy, Airbnb, Petroleo Brasileiro, Motorola Solutions, Air Products Chemicals, Becton, Dickinson, Fortinet, Block, TELUS, NRG Energy, Baxter International, Paramount Global, CNH Industrial, Fluor, and Embraer.

US markets last week

US stocks closed higher on Friday, led by Amazon.

The Dow Jones Industrial Average rose 288.73 points, or 0.69 per cent, to 42,052.19, the S&P 500 gained 23.35 points, or 0.41 per cent, to 5,728.80 and the Nasdaq Composite gained 144.77 points, or 0.80 per cent, to 18,239.92.

For the week, the S&P 500 fell 1.38 per cent, the Nasdaq dropped 1.51 per cent and the Dow slipped 0.16 per cent.

The 2-year Treasury yield climbed to 4.20 per cent. The yield on the 10-year Treasury rose to 4.37 per cent.

Crude oil prices edged up on Friday on reports Iran was preparing a retaliatory attack on Israel in coming days.

Brent futures were up 29 cents, or 0.4 per cent, to settle at $73.10 a barrel. US West Texas Intermediate (WTI) crude gained 23 cents, or 0.3 per cent, to settle at $69.49.