One day until election day.
First the scoreboard:
And now the top stories:
- The ISM non-manufacturing (or services) index fell to 54.2 in October from 55.1 a month ago. This was just shy of the 54.5 expected by economists. Any number above 50 signals expansion, so it was ultimately a positive report. However, it didn't move markets. But it's worth noting that it's the last major economic data point ahead of tomorrow's U.S. presidential election.
- Indeed, most of the chatter today was about the election. In a new piece for the Financial Times, Nomura's Richard Koo argued that Barack Obama's policies were the correct response to the recession. He pointed to Japan's experience of ill-timed deficit cuts, which caused horrendous deterioration in economic growth. Koo warned: "It is risky for politicians to explain but, until they make it clear that the economy will implode if everybody is saving and nobody is borrowing, public support for the necessary fiscal stimulus is likely to weaken, as seen during the past four years of the Obama administration."
- Most polls indicate that the race is close. However, most experts expect Barack Obama to win re-election. But in a his letter this morning, Dennis Gartman wrote that he expects Mitt Romney to win the election "quite handily."
- For many traders, it's not so much who wins the election. Rather, it could prove to be a disaster if the winner can't win by a decent margin. "The biggest political risk is the potential that the US result won‘t be known due to the combination of a tight election and re-count/mail-in issues in swing states," writes Citi's FX team. Art Cashin wrote about this in his Cashin's Comments this morning: "There is a broad hope among traders that the election is not close. With the divided state of the nation on lots of issues, a close result might be the worse outcome."
- According to a new Lundberg survey, gas prices posted their biggest drop two-week drop in four years. This was attributed to the huge drop in California gas prices and a drop in demand on the east coast due to Hurricane Sandy.
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