Tuesday's Scoop: Tense🌤️

Hey friends - how’s everyone doing with their election nerves?

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

1. US business activity spiked last month.

2. Companies ramped up overseas spending ahead of potential tax hikes.

3. Global leaders aren’t committed to protecting the environment.

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

US business activity spiked last month. The Institute for Supply Management reported that activity in the US services sector, which accounts for two-thirds of the economy, rose to a two-year high in October. This surge in positivity from core US businesses suggests that last month's weak hiring was likely a temporary setback, and the economy remains on solid footing. According to survey respondents, employment in the services sector rebounded strongly, with the ISM’s employment index jumping to the highest level since September 2023. Businesses reported upbeat conditions and little trouble from rising costs. It’s a positive sign that the broader economy is powering through the past year's challenges as prices normalize and wages catch up.

Companies ramped up overseas spending ahead of potential tax hikes. The Commerce Department reported that the gap between imports and exports grew by 19.2% to $84.4 billion in September, the widest level in nearly two and a half years. This surge in the US trade deficit was mainly due to a record $352.3 billion in imports, fueled by more spending at home on consumer goods with overseas suppliers like pharmaceuticals, computers, semiconductors, and automobiles. Imports of capital goods hit an all-time high, and food imports reached a record $18.8 billion. The threat of higher import taxes has also prompted companies to accelerate their imports. President Trump has proposed tariffs of at least 10% on a wide range of goods, with taxes as high as 60% on Chinese imports if he wins the election. Exports are better for the US economy, creating more jobs and local wealth, but record imports mean people still have solid spending power.

Global Energy Emissions: 37.4 billion tonnes of CO₂
^{An all-time high, up 1.1% from 2022. (IEA)}

Global leaders aren’t committed to protecting the environment. Efforts to preserve natural habitats faced setbacks last week as the United Nations Biodiversity Conference, or COP16, ended without securing the needed funding. Held in Cali, Colombia, the conference aimed to advance the Kunming-Montreal Global Biodiversity Framework, which seeks to halt and reverse biodiversity loss by 2030. Delegates from nearly 200 countries discussed how to mobilize $200 billion annually for conservation, including a promised $30 billion from wealthy nations, but they couldn't reach an agreement. The talks stalled when rich nations didn't commit the necessary funds, leading to the suspension of the meeting due to a lack of quorum as delegates began to leave. Only $163 million was pledged during the conference, far short of the $30 billion target. This shortfall hampers efforts to protect ecosystems and endangered species, highlighting a significant gap between environmental goals and actual support.

The Market:⬆️ +1.2%
S&P 500: 5,782.76
1Mo: +2% | 1Yr: +32% | 5Yr: +87%

The market rose on Tuesday in anticipation of the US election results. Investors hate uncertainty most of all and look forward to clarity on the potential policies ahead. Some positive financial reports from tech companies also boosted optimism for AI to continue fueling more profit growth.