Monday's Scoop: Anxious☀️

Hey friends - hope you had a great weekend. How are you feeling about the election? Make sure to vote! Find your polling place here.

Insiders, catch up with the Weekly Scoop.

Here’s what you need to know today to inform your work, spending, and investments:

1. Unemployment is still low.

2. The manufacturing sector is not doing well.

3. Corporate profits are decent but uninspiring.

Unemployment Rate: 4.1%
^{Relatively normal, low}

Unemployment is still low, but hiring has slowed. The Labor Department reported that employers added just 12,000 jobs in October—the smallest increase since 2020 and far below economists' expectations. This marks a significant drop from the 223,000 jobs added in September, and previous months were also revised downward by a total of 112,000 jobs. Hiring was likely affected by disruptions from recent hurricanes and strikes at Boeing and the US ports, which particularly impacted sectors like manufacturing, where jobs fell by 46,000—the largest decline since April 2020. Despite the weak hiring, the unemployment rate held steady at 4.1%, and wages continued to rise modestly, with average hourly earnings up 0.4% from the previous month and 4% year-over-year.

The US manufacturing sector is still in a rut. The Institute for Supply Management (ISM) Purchasing Managers' Index (PMI) measuring business activity in the industrial sector contracted again last month to the lowest level since July 2023. This marks the seventh consecutive month of decline in the manufacturing industry, which accounts for about 10% of the US economy. Likely caused by Americans spending less on physical goods and appliances, a continued slowdown in the sector has led to weaker hiring and more struggling businesses.

The Market: ⬇️ -0.3%
S&P 500: 5,712.69
1Mo: -1% | 1Yr: +31% | 5Yr: +85%

The market drifted lower on Monday as investors braced for the US election results. Last week's economic data added to the uncertainty, with mixed messages about slowing hiring and weaker corporate profit growth combined with signs of low unemployment and strong consumer spending.

Corporate profits are growing, but not as rapidly as in previous years. According to FactSet's latest report, 70% of S&P 500 companies reported their third-quarter results, and 75% earned more profit than investors expected. This matches the 10-year average but falls slightly below the 5-year average of 77%. However, companies aren’t exceeding expectations by the same magnitude as usual—reporting profits just 4.6% above estimates, compared to the typical 6.8% over the past decade. Overall, earnings have increased by 5.1% compared to the same quarter last year, marking the fifth consecutive quarter of growth. Sectors like Communication Services and Health Care are leading the gains, while the Energy sector is seeing declines that weigh on the overall performance. This slower pace in profit and revenue growth might lead to slower growth in the stock market, potentially impacting your investments or retirement savings.