Election Day

Note: Modified report today as I am en route to Arizona for a speech.

— Election Day. If you have not yet voted, vote.

— Equities on Monday: U.S. equities opened the week with losses as traders cast a wary eye on the Tuesday US elections. The Dow fell 257.59 points, 0.61%, at 41,794.60. The Nasdaq lost 59.93 points, 0.33%, at 18,179.98. The S&P 500 was down 16.11 points, 0.28%, at 5,712.69.

— Boeing workers end strike, accept new contract with 38% wage hike. Thousands of Boeing factory workers are returning to work after a multi-week strike ended when 59% of union members voted to accept the company’s latest contract. The new four-year deal includes a 38% wage increase, enhanced 401(k) contributions, and a raised ratification bonus, but does not restore the pension plans lost in 2014. Boeing CEO Kelly Ortberg urged workers to focus on rebuilding the business amid financial struggles, following a $6.2 billion third-quarter loss and recent workforce reductions.

— Oil prices rose nearly 3% on Monday as OPEC+ announced it would delay a planned increase in output by a month, extending cuts of 2.2 million barrels per day through December due to weak demand and falling prices. Brent crude futures gained $1.98, 2.7%, reaching $75.08 a barrel, while WTI crude rose by 2.85% to $71.47.

— Agriculture markets yesterday:
• Corn: December corn rose 2 cents to $4.16 1/2, marking a mid-range close.
• Soy complex: January soybean futures climbed 3 1/2 cents to $9.97 1/4 though settled near session lows. December meal futures rebounded $4.30 to $299.60. December bean oil futures saw relative weakness, falling 74 points to 45.56 cents.
• Wheat: December SRW wheat rose 3/4 cent to $5.68 3/4, nearer the session low. December HRW wheat rose 4 1/4 cents to $5.71, nearer the session high. December spring wheat futures rose 5 1/4 cents to $6.05.
• Cotton: December cotton fell 24 points to 69.93 cents, closing nearer the session low.
• Cattle: December live cattle fell 85 cents to $185.075, nearer the session low and closed at a four-week-low close. November feeder cattle lost 52 1/2 cents to $246.35 and near mid-range.
• Hogs: December lean hog futures sunk 85 cents to $83.225 and settled on session lows.

— Minnesota secures $5 billion SAF plant to propel decarbonization of air travel. DG Fuels announced plans for a $5 billion sustainable aviation fuel (SAF) facility in Moorhead, Minnesota, expected to produce 193 million gallons per year from agricultural and wood waste, creating 650 jobs and a projected $50 billion economic impact statewide. The 193 million gallons projected by DG Fuels would represent nearly half of the fuel used at the MSP International Airport.

— Trump if elected pledges 25% tariffs on Mexican imports if country doesn’t curb immigration. Former President Donald Trump promised to impose 25% tariffs on all Mexican goods if Mexico fails to curb immigration into the U.S., escalating to 50% and 75% if needed. The proposal, aimed at boosting U.S. manufacturing, has sparked concerns over consumer price hikes and potential economic retaliation.

— Chinese premier confident in economic recovery, subtly criticizes U.S. and EU trade stance. Premier Li Qiang expressed confidence in China’s economic recovery and highlighted ample fiscal and monetary policy space, while subtly criticizing U.S. and EU trade practices during the China International Import Expo in Shanghai. “The Chinese government has the ability to drive sustained economic improvement,” Li said in a speech Tuesday at the opening of the China International Import Expo in Shanghai. He added that officials had “ample space for fiscal policy and monetary policy” and reiterated that the nation would hit its economic growth target of around 5%.

— FDA and EPA approve first antimicrobial treatment for pre-harvest agricultural water. The FDA and EPA have registered the first antimicrobial product to treat pre-harvest agricultural water against foodborne pathogens like E. coli and Salmonella, a milestone aimed at bolstering produce safety and reducing foodborne illness risks. Link for details.

— What Cook Political Report says about the latest Iowa Poll. Amy Walter of the Cook Political Report emphasizes the importance of considering multiple polls to accurately assess a political race. She states, “One of the cardinal rules of politics is to never assume that one survey and one survey alone can provide an accurate reflection of the race. It’s better to have as many polls as possible, so that an outlier doesn’t have undue influence.”

The Ann Selzer poll of Iowa, sponsored by the Des Moines Register, has a history of accurately predicting election outcomes, often differing from conventional wisdom. In 2020, it showed a more Trump-friendly electorate than other polls, and in 2016, it correctly predicted Trump’s victory in Iowa when other polls favored Clinton. The recent Selzer poll shows Vice President Kamala Harris leading former President Donald Trump by three points in Iowa, a state Trump won by eight points in 2020. This surprising result is primarily driven by women, particularly older and politically independent women.

Walter writes that the Selzer poll’s findings align with other recent polls showing closer-than-expected margins in Republican-leaning Plains states like Kansas and Nebraska. These states share two key characteristics:
• Predominantly white populations
• Widespread opposition to abortion restrictions

In Iowa, a six-week abortion ban implemented in the summer is highly unpopular, with 59% of Iowans, including 69% of women, disapproving of the new restrictions.

Implications for House races. The poll also indicates strong support for Democratic candidates in Iowa’s competitive House races:
• 1st District: A generic Democrat leads a generic Republican by 13 points
• 3rd District: A generic Democrat has an eight-point lead

However, Walter notes these results are considered outliers compared to other polls showing closer races between specific candidates.

The Selzer poll, along with other recent surveys, suggests that the abortion issue may be providing a late surge of female support for Harris, especially in urban centers and college towns in states with a high proportion of white voters.

Walter says that while the data at the House level doesn’t necessarily indicate a swing strong enough to flip Iowa to Harris, the Selzer poll may be detecting late movement that other polls haven’t captured. As a result, the Cook Political Report has moved Iowa into the Likely Republican column.

Upshot: The impact of abortion restrictions on voting patterns may also be worth watching in other states with similar laws, such as Texas, where the Senate race could potentially be influenced by female voters concerned about abortion rights.

— How to assess House contests without waiting on New York and California. David Wasserman of the Cook Political Report says: “By now, you’ve heard ad nauseam that the 2024 race for the House majority runs through California and New York, the two blue states where Democrats left seats on the table in the midterms (and where Harris could underperform Biden). But if you really want to tell who’s going to win the majority on Tuesday — when many of those California and New York races likely won’t be called — look to see whether Democrats excel in the races that overlap the electoral battleground: Reps. Susan Wild (PA-07) and Matt Cartwright (PA-08) in eastern Pennsylvania, the two Democratic open seats (MI-07 and MI-08) in mid-Michigan, and GOP Reps. David Schweikert (AZ-01) and Juan Ciscomani (AZ-06) in Arizona.”

— Republicans have increased their potential voter base relative to voter registrations in several key states. Here’s a summary:

Overall trend. Republicans have seen growth in voter registrations in multiple battleground states, while Democrats have experienced declines in many areas since the 2020 election.

Key states with Republican gains:

Pennsylvania
• Republican registrations have increased by nearly 2.5% since 2020
• Democratic registrations have dropped by almost 6%
• Democrats still lead in total registrations, but their advantage has shrunk from about 666,000 in 2020 to 354,000 in 2024

North Carolina
• Republican registrations have increased by over 2.7% since 2020
• Democratic registrations have decreased by nearly 8%
• The Democratic registration advantage has shrunk from 393,000 in 2020 to approximately 130,000 in 2024

Nevada
• Republican registrations have risen by 2% since 2020
• Democratic registrations have declined by 6%
• Democrats still lead in total registrations, but their advantage has decreased from 16.5% in 2020 to just under 7% in 2024

Arizona
• While both parties lost registered voters, Republicans now have a larger advantage
• Republicans lead Democrats by nearly 260,000 registered voters (a 19% advantage)
• In 2020, the Republican advantage was only 9%

Florida
• There are now one million more registered Republicans than Democrats

Other notable trends
• In 28 out of 30 states requiring party affiliation for voter registration, Republicans have outpaced Democrats in new registrations
• West Virginia has seen significant Republican growth, with the GOP now leading in voter registration in 47 out of 55 counties

Of note: Voter registration doesn’t guarantee voting behavior, and these numbers can still change. Additionally, some states like Georgia, Michigan, and Wisconsin do not register voters by party. Nonetheless, the trend shows a clear shift towards increased Republican voter registration in several key battleground states.