Domino’s saw its shares slump 5.2 per cent after the pizza chain said its CEO Don Meij is leaving after 22 years, with former Coca-Cola executive Mark van Dyck taking over on Wednesday.

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The mining heavyweights are also lower, weighing on the broader market. The world’s biggest miner, BHP, edged down 0.1 per cent, Fortescue Metals dropped 0.2 per cent and Rio Tinto slipped 0.3 per cent, even after iron ore prices jumped 2.1 per cent overnight.

The unconvincing performance on the local bourse comes after US stocks drifted lower overnight, with the S&P 500 and the Nasdaq both shedding 0.3 per cent and the Dow Jones losing 0.6 per cent.

Marriott International fell 1.6 per cent after reporting weaker profit for the latest quarter than analysts expected. But Rupert Murdoch’s media empire Fox climbed 2.8 per cent after reporting a stronger profit than expected. That was despite increases in some costs, including for newsgathering at Fox News to cover this election cycle.

Election Day will start in the US on Tuesday [Tuesday night AEDT] but its result may not be known for some time as officials count all the votes. That’s raised fears about the possibility of sharp swings around the world because markets infamously hate uncertainty.

History may be less foreboding. The broad US stock market has historically gone on to rise regardless of which party wins the White House. And in 2020, US stocks climbed immediately after Election Day and kept going even after former President Donald Trump refused to concede and challenged the results, creating lots of uncertainty. A large part of that rally was due to excitement about the potential for a vaccine for COVID-19, which had just shut down the global economy.

“Bottom line – the US election is incredibly important, but the process is likely to be incredibly noisy,” according to Michael Zezas, a strategist at Morgan Stanley.

For markets, Zezas also points to how prices may have already moved ahead of expected outcomes from the election. A win for Trump this election could mean US tariffs on Mexican imports, for example, which could hurt the value of the Mexican peso. But the peso has already fallen against the US dollar, which could limit further moves if a Trump win were to actually happen.

A Trump victory would also be less of a surprise to markets this time around than in 2016, when Treasury yields soared amid expectations for tax cuts that could fuel a stronger US economy or further inflate the nation’s debt. Treasury yields have already climbed in recent weeks, in part due to rising expectations in some market corners for a Trump win, along with a spate of reports showing the US economy has remained stronger than feared.

Early this week, Treasury yields gave back a chunk of those gains. The yield on the 10-year Treasury fell to 4.30 per cent from 4.38 per cent late on Friday.

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Another investment that’s become a barometer in the market for Trump’s perceived chances of victory was swinging sharply. Trump Media & Technology Group veered between a loss of 3.8 per cent and a gain of 6.3 per cent within the first half hour of trading overnight. It closed 12.4 per cent higher.

The stock of the company behind Trump’s Truth Social platform had been ripping higher from a bottom in September, until it hit a wall last week and dropped at least 11 per cent in three straight days.

Beyond election day in the US, this week will also feature the latest meeting of the Federal Reserve, where the widespread expectation is for it to cut its main interest rate for a second straight time.

The Fed kicked off its rate-cutting campaign in September with a larger-than-usual cut of half a percentage point, as it widens its focus to include keeping the job market humming. It’s a sharp turnaround after the Fed kept its main interest rate at a two-decade high in order to slow the economy enough to stamp out high inflation.

The hope that’s propelled US stock indexes to records recently is that the US economy can manage to avoid a long-feared recession, in part because of the coming cuts to rates expected from the Fed.

with AAP and AP

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