Daily Market Color November 6, 2018US Elections Take Center Stage in Global Financial Markets Midterm Elections Temper Equity Markets Trading volumes in stocks were thinner than usual today as equity investors exhibited caution with the commencement of midterm elections. While the expectation is for Republicans to retain control of the Senate and cede the majority in the House of Representatives, effectively creating a gridlock for the passing of new policies, there always remains the potential for a surprise (see US presidential election of 2016). All three major equity indices posted steady gains of roughly 0.65%, while US Treasurys experienced a modest selloff into the close. Yields/swap rates finished 1-3bps higher on the day, as the 10-year note yield approached 3.23%. On the short end of the curve, the yield on the 2-year Treasury settled just inside of 2.93% – its highest level since June 2008. Oil Continues Selloff Amid Sanctions As one would expect, officials in Iran (along with their close allies) were agitated by the sanctions reinstated by the United States yesterday. Weighing in on the new measures, Iranian President Hassan Rhouhani stated “unfair sanctions are against the law, U.N. resolutions and international accords. Therefore, we will proudly break the sanctions”. He went on to add that Iran would need to put “pressure on the U.S. so it doesn’t dare to continue with its plots.” Turkish President Tayyip Erdogan similarly expressed his displeasure with the sanctions (despite Turkey being granted a waiver to continue Iranian oil imports), stating that his nation would not abide by the sanctions that were intended to “unbalance the world”. Crude oil prices declined for a seventh consecutive trading session today as WTI futures settled 1.4% lower to $62.21 after briefly crossing into bear market (20% below recent highs) territory intraday ($61.31/barrel). Openings Outweigh Unemployed In a relatively light day of economic data releases, the Labor Department’s JOLTS report provided further evidence of a tight jobs market. Job openings during September totaled a seasonally adjusted 7.009 million, a slight reduction from August’s record high of 7.293 million. The number of Americans actively searching for work over the same period totaled 5.96 million, evidence of the continued difficulties for employers to find qualified workers. Furthermore, the average time required to fill a vacant position increased to 32.3 business days, the longest period reported on record. On the subject of labor markets, today Amazon Inc. announced that it would be splitting its second headquarters between two locations (25k workers at each), effectively ending a yearlong campaign. New York and Virginia are currently rumored as frontrunners for the two locations.