E TalkMarkets Tuesday Talk: A Run Up To The Election Round-Up

Today is Tuesday, October 27 and that means we are just shy of 7 days till the U.S. Elections. The latest sample of 100 possible outcomes conducted by Nate Silver of 538, gives Trump a 12 in 100 chance of winning, Biden an 87 in 100 chance, and a 1 in 100 chance of no Electoral College majority (House of Representatives decides the race).

The majority of other polls also give Biden the edge, but as the folks at 538 remind us:

So if the markets have already factored in a Biden win, and many companies reporting better than expected Q3 earnings what was the cause of the sharp bump downwards, yesterday? Realization that there will be no pre-Election stimulus package, COVID-19 worries, the one day, 21% drop in software maker SAP's (SAP) stock (yesterday the company said that the pandemic will delay the company's plans for cloud revenue and overall sales and profit goals by one to two years)? Jitters and more jitters. But a seesaw is a seesaw and U.S. Market futures are trading in the green this morning, albeit light green. To keep things in perspective see the 1 day, 1 month and 1 year performance metrics for the S&P 500 and the Nasdaq below:

1 Day - October 26

M-t-D September - October 

Y-t-D 2019-2020

Source: The New York Times

In today's column we look at what is on the minds of our TalkMarkets' contributors other than (but not despite COVID-19) the election. 

 Jim Wiederhold in a TalkMarkets Editor's Choice article entitled A Supply Drop And Demand Pickup Pushed Soybeans To A Three-Year High, brings us up to date on what has been a recent rollercoaster ride for the commodity (SOYB) in terms of both supply (weather related) and demand (largely COVID-19 related).

"Only a few months ago, it seemed that global soybean supplies were more than ample, and in the case of the U.S., a semi-permanent soybean mountain had been built in the wake of damaged demand from its top customer, China. Fast forward to late October 2020, and the S&P GSCI Soybeans is up 29% since the low in March of this year, making a new high last week driven by abrupt supply cuts and the rapid return of export demand. Earlier this month, the USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report forecast a large, and somewhat unexpected, reduction in global soybean stocks. Exhibit 1 illustrates global soybean ending stocks in the 2020-2021 crop year dropping in October 2020 to the lowest level in four years."

Wiederhold makes the following observations worth noting:

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