The S&P 500 Index was down 5.64% last week (October 26-30) and closed the month 2.77% lower. Sentiment was driven by the increase in Coronavirus infections in the U.S. and in various countries around the world. Investors digested the news which raises concerns about the sustainability of the economic recovery and future performance of individual companies. In addition, several agricultural commodities reversed direction while the focus shifted to the U.S. election.
By the markets close at 4 pm Wednesday, the race was still too close to call. President Trump’s team claimed victory early Wednesday morning and announced legal actions to stop the vote count, while Joe Biden spoke about democracy and the importance of counting every single vote as a symbol of defending democracy. Despite the uncertainty of a winner and the increased possibility of a Democrat president working with a Republican senate, stock indices rallied. In fact, Wednesday was the biggest post-election S&P 500 rally in history.
The state of California passed Prop 22, which allows Lyft and Uber drivers to be considered contractors and not employees, along with other benefits for their drivers. These companies’ drivers faced a challenge in being considered employees mainly due to schedule restrictions. The passing of Prop 22 amounted to big gains for both companies and drivers. Uber and Lyft stock’s price increased 14.59% and 11.28% respectively on Wednesday with Uber’s stock back at pre-pandemic levels.
Uber Technologies Inc – YTD
Lyft Inc YTD
An interesting article came out this week on Malaysian palm oil. Inventories are near 3-year lows due to production decreases in the world’s second largest producer, prices continue to rally.
Crude Palm Oil (KO) YTD
The next few days will be important as the markets digest the conclusion of the U.S. election and what it means for fiscal stimulus in the months ahead.