Weekly PROPHET NOTES 11/4/24

Global Outlook: T minus one day

One day to go. Somewhere this week, half of the US will have a full fledged meltdown. Majority of models and markets now project 55/45 odds meaning we are in a coin flip territory going into the election day. I do not think that we had such a situation since probably 2000 with Bush vs Gore.

With the obvious highlight of the week there is little else happening in the world. Elections in the most important country in the world are taking all of the news cycle bandwidth. Pretty soon it will be all over and we will be able to once again focus on other matters.

Being completely honest, there will be little difference in how the world will shape up, regardless of who will win. Sure we will have more surface level drama with Trump, but we have already seen how he governs. Similarly with Kamala, this will be mostly a continuation of current policy. No shockers in any direction.

Enough of introduction, let’s move towards a short summary of the week and what lies ahead.

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Weekly Recap

Last week we have mostly seen the last stretch of the presidential campaigns along with some economic data.

US Politics

11:11:11 to go and while Trump has lost 10 p.p. off his lead, he is still ahead.

Trump’s probability of win has fallen mainly due to the recent Iowa poll showing Harris with a 47-44 lead. In theory Harris +3, in practice 9 p.p. unallocated means that Iowa is close. While usually accurate, one poll from one state cannot swing the odds too much.

I have already covered my thoughts on the campaigns as well as the winner, in case you missed it, take a look here:

Election Special: Heads or Tails?

I will be back with more US politics later on with some markets summary as there is really little more to say on the race.

Wars

Even the war department is sitting on pins and needles as tomorrow’s choice can determine the future of foreign policy. Despite Iran vowing revenge, I do not expect them to strike now and in the future it depends on who wins. With end of October I am completely off any geopolitical markets with election being a coin flip.

North Korean soldiers are now in the Kursk region, with 8,000 troops projected to be there. We are bound to hear a lot more about it once the dust settles on the election winner. I am a bit repetitive now, but it is what it is. Whole world awaits who will be the new leader.

Other events

In a major surprise, we had only 12,000 jobs added in October.

This is the hurricane effect at play, but it still baffled many analysts. At the same time the unemployment was at 4.1%, at consensus.

That is all major news from last week, let’s look ahead.

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Global Outlook

All eyes are at the US elections. Besides knowing the winner, many are looking to guesstimate when we will know. Traders are predicting that we should know by Thursday:

I believe that we will not be sure on the election night. Wednesday / Thursday are a good estimate and during the 1-2 days between the elections and the results, we are bound to hear a lot of propaganda with each side declaring social media victory way before official confirmation. Good value for a trade.

Regardless of the outcome, I expect protests and denial to appear. US politics got extremely polarized and neither side will accept defeat easily, especially a close one. Some doomers predict a civil war, but I doubt we will see such violence. There will be protest, there may be some violence, but that is all. They will persist up until the infamous January 6th and then we shall finally have some peace regarding US elections.

We have election night only once every four years - this means that despite my time difference I will stay late on X to comment what is going on and adjust my positions based on updates from the states. Stay tuned!

Markets ending this week