Good morning. Here's what happened overnight and what you need to know today.
1.
Election economics: The US economy grew 2.8% in the third quarter, driven by strong consumer demand and bolstered by business investment and government spending, particularly in defence, according to a preliminary estimate by the Commerce Department. Days before the 5 November US presidential election, the data came slightly lower than the 3% GDP growth expected, but shows the economy achieving a “soft landing” with resilient growth and easing inflation despite high interest rates. Consumer spending rose 3.7%—its fastest pace since early 2023—while inflation, measured by the personal consumption expenditures price index, eased to 1.5% from 2.5% in the prior quarter. Business equipment spending surged 11.1%, though high borrowing costs continued to weigh on housing. Defence spending added over half a percentage point to GDP growth. “What’s not to like?” said Chris Low, chief economist at FHN Financial. “Solid GDP growth fuelled by strong consumption and strong capital equipment spending, all accompanied by inflation sliding back toward 2%.” (Capital Brief)(Bureau of Economic Analysis)(The Wall Street Journal)(Reuters)(The New York Times)
2.
Super exit: Super Micro Computer said its auditor, Ernst & Young resigned following integrity concerns and issues related to governance, internal financial controls and transparency at the AI server maker. EY’s exit follows Super Micro’s delayed financial filings and an August report from Hindenburg Research alleging accounting manipulation. Last month, the DOJ also launched an investigation into claims from a former employee that the company overstated revenue. In late July, EY raised issues around "governance, transparency, and completeness of communications to EY,” prompting Super Micro to form a special board committee and engage Cooley LLP and forensic accounting firm Secretariat Advisors. As new information emerged, EY cited doubts about Super Micro’s commitment to integrity and board independence from management, leading to its resignation. Super Micro’s shares plunged over 34% to $32.20, trimming earlier AI-driven gains to a 16% increase this year. SMCI disagreed with EY’s decision, saying it doesn’t expect any restatement of prior financials. (Capital Brief)(Super Micro Computer statement)(Reuters)(Bloomberg)
