US stocks rise sharply as election results keep trickling in

By CNN Business

Updated 1:52 a.m. ET, November 5, 2020
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9:08 a.m. ET, November 4, 2020

Private payrolls show job gains were lower than expected in October

From CNN Business' Anneken Tappe

It's not only Election Day Week, it's also jobs week! (Please direct your complaints to the folks who make the schedules.)

As usual, the first jobs data point out of the gate was the ADP Employment Report, and it wasn't pretty.

America added 365,000 private sector jobs in October, according to ADP. That's nearly half the 650,000 economists had expected. Ouch. For comparison, 753,000 jobs were added in September.

The services sector added the most jobs, with the leisure and hospitality industries leading the way. After being decimated by the spring lockdown, it's these areas of the economy that still continue to recover at the fastest pace because they have the most ground to make up.

The ADP report doesn't predict what the government's official jobs report will say on Friday, but it gives us an indication of what its flavor might be.

Economists are worried that the labor market won't be able to continue recovering at the rate it has over the summer. As of last month, the United States was still down 10.7 million jobs from February. Whoever wins the presidential contest will have to work on fixing jobs.

8:12 a.m. ET, November 4, 2020

Stock futures extend their gains

From CNN Business' Anneken Tappe

We got about an hour and a half left until the opening bell rings on the New York Stock Exchange and futures are edging higher.

They extended their gains some, with Dow futures up 0.5%, or some 150 points, and futures for the S&P 500 up 1.6%. Nasdaq Composite futures were up a whopping 3.3%.

This isn't exactly the stock reaction to a delayed election outcome that was expected. Where Wall Street was hoping for certainty -- about both a winner and the next round of government stimulus -- we got delays. Usually markets hate uncertainty, but today they're headed higher in the face of just that.

One theory why the market, and particularly the Nasdaq, is up so much, is stocks that saw a rapid rise under the current Trump term could benefit from a second one.

Another theory is that markets are growing more confident that Joe Biden will end up winning. Betting markets are very clearly favoring a Democratic win, with PredictIt showing 80% for Biden.

But one way or another, investors expect volatility until the results are clear.

7:49 a.m. ET, November 4, 2020

Get ready for more executive orders

From CNN Business' Paul R. La Monica

The outcome of the presidential election may not be clear just yet. But one thing may be certain. Either a President Biden or Trump in a second term may need to continue to rely on executive actions to get things done in Washington.

"If Biden wins, he will have a tough time passing a lot of things that will require legislation," said John Vail, chief global strategist at Nikko Asset Management. "But he'll still have the executive orders. It could get unruly and messy."

Trade deals will be a major focus. If Biden does wind up as the next president, he could use some executive orders to strike new deals with other nations in order to try and restore some of the fractured relationships with allies and trade partners created by Trump.

"Executive orders will be big issue, especially on the trade front. Biden would want a more multilateral approach," said Rich Steinberg, chief market strategist with The Colony Group.

7:46 a.m. ET, November 4, 2020

The Federal Reserve is starting its two-day policy meeting today

From CNN Business' Anneken Tappe

Even though we don't know who has won the election yet, we're back to business as usual in some parts of Washington: The Federal Reserve is kicking off its two-day monetary policy meeting today and will announce its updates tomorrow at 2 pm ET.

Fed Chairman Jerome Powell will hold a press conference at 2:30 pm ET. Usually, the Fed meets on Tuesday and Wednesdays, but the meeting was rescheduled due to Election Day.

Odds are not much will change policy-wise. The Fed slashed interest rates to zero in the wake of the pandemic in March and has since committed to leaving them there for years to come.

One thing is for sure, however, Powell will get lots of questions about the election during the press conference, and he'll probably answer very few of them.

Though a nominee of President Donald Trump, Powell has been under fire from the administration. Trump repeatedly attacked Powell while the central bank was raising interest rates before the pandemic when the economy was healthy.

Powell has said again and again that more fiscal and monetary stimulus is needed to get the economy through this crisis. On Friday, the central bank lowered the minimum loan sizes of its Main Street Lending Facility, to make the loans more accessible to smaller businesses.

7:24 a.m. ET, November 4, 2020

Breakfast continues to bolster Wendy's

From CNN Business' Jordan Valinsky

Wendy's (WEN) just reported its best global same-store sales in 15 years, partially because of its recently launched breakfast menu.

The fast food chain said in its third-quarter earnings report that US same-store sales grew 7%, slightly above analysts' expectations. Revenue was $452.2 million, an increase 3% year over year.

The increase in revenue was "driven by an increase in same-restaurant sales which benefited from the positive impact of the company's new breakfast daypart in the US," CEO Todd Penegor said in a release.

Wendy's stock is flat in premarket trading.

7:12 a.m. ET, November 4, 2020

Uber and Lyft soar after Prop 22 passes in California

From CNN Business' Paul R. La Monica

Uber and Lyft stickers are displayed on a car at Los Angeles International Airport in California on August 20.
Uber and Lyft stickers are displayed on a car at Los Angeles International Airport in California on August 20. Etienne Laurent/EPA-EFE/Shutterstock

Uber, Lyft and other gig economy companies are breathing a sigh of relief. California voters passed Proposition 22 Tuesday, a move that will let the ridesharing companies continue to classify drivers as independent contractors and not as employees that would be eligible for many benefits.

Shares of Uber (UBER) surged 10% in early trading Wednesday while Lyft (LYFT) was up nearly 15%. The stocks had rallied in recent days on hopes that Prop 22 would pass.

The ridesharing giants, along with fellow gig economy companies DoorDash, Instacart and Uber-owned Postmates, spent more than $185 million lobbying for Prop 22. That made the issue the most expensive ballot measure ever in California. But some Uber drivers have filed a lawsuit, claiming that there was pressure on them to vote in favor of Prop 22.  

6:55 a.m. ET, November 4, 2020

Blue wave expectations are starting to dim

From CNN Business' Paul R. La Monica

The outcome of the presidential election is still not clear. But no matter who wins, it appears that a blue wave scenario may not be in the cards. The battle for control of the Senate is still up in the air and there are some close races in the House as well.

What does that mean for the markets? It's been a bumpy morning of premarket trading, but Dow and S&P 500 futures weren't pointing to any dramatic moves. Tech stocks continue to rally, though.

Investors are mostly taking the news in stride. It appears that neither Democrats nor Republicans will have a clear mandate, which could mean more compromise.

"There wasn't a blue wave. We might get some tax increases but they won't be severe. And tech companies will still do well regardless of who's president," said Ken Van Leeuwen, managing director and founder at Van Leeuwen & Company.

Van Leeuwen added that he still thinks Congress and the president will eventually move past the election rancor and approve more Covid-19 financial aid for struggling consumers and businesses.

"We're going to get stimulus...with or without Trump," he said.

5:32 a.m. ET, November 4, 2020

US stocks swing wildly, pointing to a mixed open

From CNN Business' Julia Horowitz

US stock futures swung wildly early Wednesday as the prospects of a quick, decisive result to the election faded and President Donald Trump made baseless claims about the vote, leaving investors on edge.

Dow (INDU) futures had plunged more than 400 points, or 1.5%, after Trump prematurely claimed victory and said he would go to court to prevent legitimate votes from being counted.

Stocks later pared back losses but remain jumpy in premarket trading.

Here's were things stand this morning.

  • Dow futures were down 35 points, or 0.1%
  • S&P 500 futures were 0.6% higher
  • Nasdaqfutures rose 3%

Uncertainty is the enemy of markets. Investors had hoped that early results would point to a clear winner sooner rather than later, avoiding the nightmare scenario of a contested election.

Stocks finished sharply higher Tuesday, with the Dow logging its best day since July, as Wall Street had predicted a quick victory for former Vice President Joe Biden. The S&P had its best day in a month.

5:42 a.m. ET, November 4, 2020

China's yuan has its worst fall in years on fears of renewed US tension

From CNN Business' Laura He

The US presidential election is far from decided. But Chinese markets may already be getting jittery about the possibility that President Donald Trump could pull out a second term.

China's yuan briefly plunged as much as 1.4% against the US dollar on Wednesday as Trump remained in contention with former Vice President Joe Biden and was projected to win key states like Florida and Texas.

The drop in the offshore yuan, where the currency is traded more freely, is the largest single-day percentage drop since February 2018, according to Stephen Innes, chief global market strategist for Axi.

The offshore yuan eventually pared losses, and was last down 0.7%, or about 6.7 yuan per US dollar. The more tightly controlled onshore yuan slumped 0.6% after falling more than 1% in Shanghai.

"In light of China-US tensions, the [renminbi] market movement hinges on the US election outcome," according to Ken Cheung, chief foreign exchange strategist for Asia at Mizuho Bank. He wrote in a research note Wednesday that should Trump secure reelection, that would suggest "the extension of America First agenda and protectionism policy."