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The Election Is Tuesday. The Oil Market Is Waiting for Wednesday.
Washington has held off new strikes on Iran while the country votes. Governments in the region expect strikes could resume once the ballots are in. Brent oil settled near $113 on Friday, and gasoline averages $4.20 a gallon. This week’s most important deadline for your money sits off the economic calendar.
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Oil at $113 does not reach every investor the same way. Consumer prices rose 3.7% in the year to September. At that pace, a fixed $3,000 monthly pension buys more than $100 less than it did a year earlier. Income alone no longer covers the gap. A retirement portfolio now has to pay you, keep growing and hold its value as each dollar buys less. Those are three different jobs, and they rarely sit in one holding.
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What’s on the Table
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• Mon Nov 2: Apple and Palantir report after the close. Wall Street expects about $1.99 a share from Apple, which guided to a gross margin of 47% to 48%. ISM’s factory survey, at 54.5 in September (above 50 means growth), comes out at 10 a.m.
• Tue Nov 3: Election Day. All 435 House seats, 35 Senate seats and 36 governorships are on the ballot, plus utility regulators in nine states.
• Wed Nov 4: ISM’s services survey, at 54.9 in September. The Treasury also sets out how much debt it plans to sell.
• Fri Nov 6: The October jobs report. September added 29,000 jobs. Forecasts center near 55,000, with unemployment at 4.2% and hourly pay up about 2.9% over the year.
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Details
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The Vote Is Priced. The Day After Is Not.
Prediction markets settled most of Tuesday weeks ago. The betting market Polymarket puts Democrats at 94% to win the House and about 70% to win the Senate. Odds that lopsided are already in the price of your index fund. The part with money attached sits lower on the ballot. Voters in nine states, from Georgia and Arizona to Louisiana and Montana, also choose the regulators who approve their electric rates. Federal data show home electricity rates rose over the past year in 44 states and Washington, D.C.
Part of the strain comes from a new kind of customer: the AI data center. Data centers used about 4.4% of U.S. electricity in 2023. A federal study projects up to 12% by 2028. In a Gallup survey released in May, 71% of Americans opposed an AI data center near their home. Facing that resistance and a slow grid, more data center owners now build their own power plants, off the public grid. Tuesday will show how much of the anger over power bills reaches the ballot.
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The pause. The other half of Tuesday’s story is playing out in the Gulf. On Friday, Qatari mediators spent more than 12 hours in Tehran trying to restart direct talks between Washington and Iran. On Saturday, Iranian negotiators met them again in Doha.
Secretary of State Marco Rubio said Trump would “prefer to solve it diplomatically,” and that “talks have actually never stopped.” In early October, Trump said the U.S. would not resume strikes before the midterms. American officials have since told allies to prepare for possible strikes after the vote.
Iran’s price for a deal is steep. It wants the blockade of its ports lifted and its frozen assets released. Its threat is steeper. Tehran says it would answer any new attack by hitting U.S. and Israeli targets in neighboring countries. When its main gas field was struck in March, it named energy sites in Saudi Arabia, Qatar and the UAE as targets.
The oil inside the inflation number. Oil reaches well past the gas tank. In September, consumer prices rose 3.7% from a year earlier, per the Labor Department. Energy prices rose 20.4%. Gasoline rose 34.2%. Strip out food and energy, and prices rose 2.6%.
So a large share of the inflation the Fed is fighting comes out of an oil barrel. After Wednesday’s Fed meeting, market bets put the odds of a December rate hike near 85%. On Friday, St. Louis Fed President Alberto Musalem said the Fed needs to act “soon.” A deal that reopens the Strait of Hormuz would drain much of that case. A resumed war would refill it.
Most Gulf producers still pump well below their OPEC+ quotas. A quota they cannot reach adds no oil. The cartel is not the swing vote this month. Tehran is.
Gasoline averaged $4.20 a gallon on Friday, per AAA, against $2.81 in early January. A 15-gallon fill-up costs about $21 more than it did then.
Tesla’s answer to that bill skips the pump entirely. Since September, it has offered public rides in Austin in its Cybercab, an all-electric two-seater with no steering wheel or pedals. AI software does all the driving. At launch, 45 were registered in Texas. Musk’s biggest backers call that small fleet the opening move in Tesla’s biggest AI bet.
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Friday’s paycheck. On Saturday we said this Friday’s jobs report would help set the price of borrowing. The hiring count gets the headlines. For households, pay matters more.
Hourly earnings rose 3.0% over the year in September, against prices up 3.7%. The Labor Department’s broader wage measure, released Friday, showed private wages down 0.6% after inflation. A weak count with slowing pay would give the Fed a reason to wait. A strong one, on top of $113 oil, would make a December hike hard to avoid.
Monday’s report tests the other side of the household budget. Apple reports after the close, its first results since John Ternus became chief executive. In July, his predecessor Tim Cook described a “100-year flood on memory pricing.” He said Apple had “reluctantly raised prices” on Macs and iPads. A margin near the low end of Apple’s 47% to 48% range means Apple is absorbing the memory bill. Higher prices on the next devices mean you are.
Palantir reports the same evening. Its numbers show how fast companies are paying to put AI to work, starting with the software they run on. A Google research team surveyed nearly 5,000 tech workers last year. Almost all now use AI on the job, yet 30% said they have little or no trust in the code it writes. The study also tied wider AI use to more software updates that fail or need rework. Making the tools fit what a company already runs has become a business of its own.
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Where that leaves you. The decision that moves your money most may come from Doha or Washington, any day after Tuesday. An S&P 500 fund owns little of the oil trade either way: energy was about 3.8% of the index last week. A six-month Treasury bill paid about 4.36% at last Monday’s auction, and it pays that whichever way the war turns.
I spent thirty years watching investors try to trade around one headline date. The better test is whether your plan holds under both endings. A deal pulls oil down. A strike pushes it up.
Tuesday counts the votes. What Washington does next may set your gas price. Friday’s jobs report tells the Fed whether to meet that price with a rate hike.
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Harold Winston
Thirty years advising individual investors. Now reads markets for a living.
Stay grounded while markets move fast.
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