A massive dock workers' strike erupted Monday across 36 East and Gulf Coast ports, throwing a wrench into 60% of America's container trade as labour negotiations crumbled over pay and automation concerns. Smart retailers saw the storm coming and padded their inventories, creating a buffer against immediate shortages for most goods, though banana lovers might need to pivot to apples. Each idle day at the ports fans the flames of supply chain chaos and could spark price inflation, but political pressure cookers near election season make a two-week resolution likely. The aftermath will ripple through mid-November as ports tackle the container backlog, with attempts to bypass the bottleneck via West Coast shipping routes proving both costly and impractical. Union leader Harold Daggett, representing 45,000 workers, is determined to secure a 77% wage increase for the next 6 years.
EQUITY
Stocks were down more than 1% on the perfect storm that is political uncertainty, Hurricane Helene, and union worker strikes in conjunction with the Middle East escalation by Israel into Lebanon that sees US troop sent for support. The China market is seeing continued strength, surpassing a 20% gain on its second week of rally since stimulus after billionaire investor David Tepper called for an aggressive buy into the China market.
GOLD
Gold prices oscillated as Middle East tensions sent investors scrambling for safe havens, with Iran's missile manoeuvre toward Israel taking centre stage. The precious metal's performance hangs between geopolitical storms and the Fed's monetary path, as Chair Powell hints at more modest rate-cut steps ahead. As the spotlight now shifts to upcoming U.S. employment data, gold traders remain poised on the edge of their seats, watching for cues.
OIL
Oil prices may have been overpriced after Iran's retaliatory attack on Israel increased tension, with both countries threatening further military action despite international calls for peace. The conflict supports higher oil prices, though the moderate price increase suggests other market factors are keeping prices in check. OPEC+ ministers are set to meet on Wednesday and are expected to stick with their current policies, highlighting the importance of member countries meeting their production targets.
CURRENCY
The US dollar benefitted as investors sought safe-haven assets after Middle East escalating tensions. It was further supported by stronger US job openings data, while the euro weakened following easing eurozone inflation figures that increased expectations for an ECB rate cut in October. Meanwhile, the Japanese yen retreated against the dollar after Japan's new Prime Minister Shigeru Ishiba and other officials downplayed the likelihood of another Bank of Japan rate hike, suggesting careful economic assessment for future monetary policy decisions.
