US votes in historically tight election

Good morning. Here's what happened overnight and what you need to know today.

1.

Election day: Voting began in the tightly contested US presidential election, with initial results coming from Dixville Notch, New Hampshire, where Kamala Harris and Donald Trump each received three votes. To win, a candidate needs 270 of the 538 electoral votes, achievable even without securing the popular vote, as Trump did in 2016. Most states follow a winner-takes-all system, except Nebraska (5 votes) and Maine (4 votes), which use proportional allocation. Polls in the seven key battleground states start closing at 7:00pm ET (11:00am AEDT), beginning with Georgia (16 votes) and ending with Nevada (6 votes) at 10:00pm ET (2:00pm AEDT). Trump voted in West Palm Beach, Florida, and returned to Mar-a-Lago to monitor results, while Harris, who voted early alongside over 80 million Americans, will watch from her alma mater, Howard University. In Georgia (16 votes), polling stations received bomb threats with “Russian origins,” though officials deemed them “not viable.” In Wisconsin (10 votes) and Pennsylvania (19 votes), counting may extend past Tuesday as mail ballots cannot be processed until Election Day morning, creating a backlog. Both campaigns are prepared for a delayed outcome, with legal teams ready for post-election challenges. Today’s election also includes races for the US Senate and House, as well as abortion rights votes in 10 states, including Arizona, Florida, Missouri, Nebraska and South Dakota, where abortion is restricted or banned. (Capital Brief)(AP)(NYT)(FT)(CNN)(Fox)

2.

Strike ends: Boeing’s machinists union, representing 33,000 members, voted 59% in favour of a new contract, ending a costly 53-day strike for the aerospace giant. The contract includes a 43% compounded wage increase over four years, a USD12,000 ($18,110) ratification bonus, and increased retirement contributions. It does not restore the pension plan that was frozen a decade ago. Union members will begin returning to work by 12 November. The agreement also includes a commitment to build Boeing’s next commercial airplane in Seattle. According to Anderson Economic Group, a Michigan-based research firm, financial losses during the strike reached an estimated USD6.5 billion for Boeing, impacting suppliers and halting production of its 737 Max and freighter models. The action triggered layoffs at many of Boeing’s 10,000 suppliers and cost the US economy an estimated USD11.5 billion in losses. Boeing CEO Kelly Ortberg, hired shortly before the strike, said the company would “move forward by listening and working together.” (Capital Brief)(International Association of Machinists and Aerospace Workers statement)(Boeing CEO statement)(CNN)

3.

Gallant axed: Israeli Prime Minister Benjamin Netanyahu dismissed Defense Minister Yoav Gallant, citing “a crisis of trust,” The Associated Press reported. Gallant, a Likud member and defence minister since 2022, has repeatedly clashed with Netanyahu over the Gaza war strategy and past judicial reforms. Israel Katz, the foreign minister, will succeed Gallant, with Gideon Sa'ar taking over Katz’s role. In a video statement, Netanyahu said “significant gaps” in war management led to his decision, adding that “complete trust” is crucial between Israel’s prime minister and defence minister. Gallant responded on social media that Israel’s security “was and will always remain my life’s mission.” He did not directly address his dismissal. (AP)(NYT)

4.

Service lift: US service sector activity surged in October, hitting a 26-month high, with the ISM non-manufacturing PMI reaching 56, up from 54.9 in September. The services sector accounts for more than two-thirds of the world’s biggest economy. A PMI reading above 50 indicates growth. The growth defied expectations, supported by hiring increases and robust consumer spending, even amid recent Boeing strikes and hurricane disruptions. Economists polled by Reuters had forecast the services PMI declining to 53.8. Employment climbed to 53, from 48.1 the previous month, marking the highest reading in a year – in contrast with last Friday’s labour report showing employers sharply slowed hiring in October. The report comes as Americans head to the polls and ahead of an expected 25 basis point cut to the Federal Reserve’s key interest rate to the 4.50% - 4.75% range. (Capital Brief)(ISM)(Reuters)(Bloomberg)

5.

AI drive: Palantir shares surged over 23.6% to new record highs after the company raised its 2024 revenue forecast for the third time citing “unwavering demand” for AI, now projecting USD2.805-USD2.809 billion, compared to its prior USD2.742-USD2.750 billion estimate. The Peter Thiel’s data analytics firm attributed the hike to demand for its AI-driven software, especially within the US government, where third-quarter revenue rose 40%, making up 44% of its total sales of USD725.5 million. Analysts raised concerns about its steep valuation, with Morningstar saying that “any bump in the road, such as sales execution challenges or weaker-than-expected top-line growth or guidance, could materially affect the stock's valuation.” Palantir's forward price-to-earnings ratio stands at 95.43, significantly above Oracle’s 25.60 but below Snowflake's 126.92, according to Reuters. (Reuters)(FT)

6.

Netflix raid: French and Dutch tax fraud investigators raided Netflix offices in Paris and Amsterdam, Reuters reported citing a French judicial source. The preliminary investigation, initiated in November 2022 by France’s financial crime prosecutor, is looking into potential tax fraud and money laundering linked to Netflix’s operations, the news agency said. News website La Lettre last year reported Netflix's French subsidiary was facing scrutiny from authorities over its low reported revenue, which allegedly conflicted with subscriber numbers in France. The site claimed that between 2019 and 2020, Netflix Services France paid under €1 million in taxes, partly by routing revenue through a separate unit in the Netherlands—a practice the company reportedly ceased in 2021. According to Reuters, Netflix’s French revenue jumped to €1.2 billion ($1.97 billion) in 2021 from €47 million the previous year. Neither Netflix, nor the financial prosecutors commented to Reuters. (Reuters)

7.

CVC raid: French police raided the offices of the French football league (LFP) and private equity firm CVC Capital Partners in Paris as part of a corruption investigation, The Financial Times reported citing a judiciary official. The probe focuses on alleged corruption and misuse of public funds tied to the 2022 agreement between LFP and CVC, where CVC invested €1.5 billion ($2.47 billion) for a 13% stake in a new entity managing LFP’s broadcasting rights Sports newspaper L’Équipe also reported the home of LFP head Vincent Labrune was also searched. The French Senate recently questioned the deal’s €37mn in banker and lawyer fees and Labrune’s €3mn bonus, raising concerns over potential conflicts of interest. This investigation was sparked by a complaint filed by an advocacy group called AC!! Anti-Corruption. (FT)

8.

Nazi plot: German police arrested eight suspected members of an extremist group, known as the "Saxonian Separatists," including an elected official with the far-right Alternative for Germany (AfD), according to media reports. The men, some of whom were under 21, allegedly planned to establish a Nazi-inspired regime in eastern Germany and carry out ethnic cleansing. Among those reportedly detained was Kurt Hättasch, a councillor with the AfD party, the FT said citing local German media. Prosecutors told media the group was driven by racist and apocalyptic beliefs, had conducted paramilitary training and procured military hardware, including combat gear and bulletproof vests. The men believed Germany was nearing collapse on a "Day X" and sought to create a new government. Searches continued Tuesday. The AfD denied any connection to the group and said it would expel Hättasch if the charges prove true. (FT)(Reuters)