Down to the wire
Investors on Monday appear to be unwinding bets on the so-called Trump trade. In a major reversal, bonds have rallied and the dollar and crypto currencies have dipped in the race's final hours.
One explanation is a surprising new poll that showed Vice President Kamala Harris, powered in part by support from women and older voters, edging ahead in deep-red Iowa -- a finding that's also led to a tightening of Donald Trump's lead in political prediction markets.
Why the change of heart? The highly regarded Ann Selzer/Des Moines Register/Mediacom Iowa poll that was published on Saturday gave Harris a three-point advantage over Trump in the Hawkeye State, a Republican stronghold. "It's hard for anybody to say they saw this coming," Selzer said.
Some urged caution about the poll. The Economist questioned whether the small sample size in Selzer's poll made it a good predictor of what might happen in other states. And the Trump campaign pointed to another Iowa poll out this weekend that showed the former president with a 10-point lead over Harris.
But Michael McDonald, a politics professor at the University of Florida who runs a vote-tracking site, pointed to similar dynamics in a recent Kansas poll.
The Selzer poll has roiled the political betting markets. Following its publication, Trump's odds of victory fell on platforms including Polymarket, after they had climbed in recent weeks, in tandem with crypto and other elements of the Trump trade.
Trump's odds on Polymarket were at nearly 58 percent on Monday, down from 67 percent on Wednesday. (A caveat: Polls measure how voters intend to cast their ballots, while prediction markets track the odds of a candidate's victory implied by bets on a platform.)
Monday's flurry of activity sticks out as some on Wall Street seem reluctant to make any major moves with the race deadlocked. Business leaders have told analysts that election uncertainty has clouded their outlook, and investors fear civil unrest in the event of a disputed outcome.
Trump is leaning heavily on powerful allies in the final stretch, including Elon Musk. The tech mogul has transformed his X feed into a Trump booster megaphone and has poured at least $130 million into a super PAC focused on getting out the vote in swing states.
Another key player is Howard Lutnick, the C.E.O. of Cantor Fitzgerald and a co-chair of Trump's transition team. The Wall Street Journal reports that he has become a key recruiter for White House staff should Trump win, but his public profile has alarmed some Trump allies who say he should wait for the votes to be counted.
In other election news: Trump said on Sunday that if elected, he would consider taking action against vaccines and fluoride in the country's water supply, two public health issues championed by Robert F. Kennedy Jr. And Judith Kent, the longtime Democratic donor and wife of JPMorgan Chase's Jamie Dimon, knocked on doors in Michigan for the Harris campaign this weekend, Bloomberg reports.
HERE'S WHAT'S HAPPENING
Chinese lawmakers meet amid market hopes for more stimulus measures. The executive body of China's legislature kicked off a weeklong meeting on Monday and is expected to sign off on the next stage of an effort to lift the economy, after rolling out measures in September that boosted stock markets and the property sector. Investors hope that the authorities will unveil a wider plan to improve consumer demand, but President Xi Jinping may not unleash a hoped-for big "bazooka."
Oil prices jump after OPEC+ delays plans to increase output. The prices of Brent crude, the international benchmark, and West Texas Intermediate, the U.S. yardstick, were both up more than 2 percent on Monday after the cartel announced its plans on Sunday.
Warren Buffett cuts Berkshire Hathaway's Apple stake further. The Oracle of Omaha slashed his conglomerate's holdings in the iPhone maker in the third quarter by about 25 percent, or $70 billion, after roughly halving it in the previous quarter. Buffett suggested at Berkshire's annual meeting in May that selling Apple shares was driven in part because of tax reasons. But Berkshire has sold $166 billion worth of stocks over the past two years.
Boeing's woes weigh on Europe's largest airline. Ryanair cut its expectations for passenger growth in 2025 to 210 million passengers from 215 million and blamed delivery delays from the aircraft maker. Boeing workers, who have been on strike for nearly two months, are set to vote on a revised contract proposal on Monday.
The other tax cut making executives nervous
For businesses, one of the biggest consequences of the election will be the fate of corporate tax cuts that expire next year. But wealthy corporate leaders have their eye on their personal finances as well.
The 2017 tax legislation also roughly doubled the amount that extremely wealthy people can give as gifts without incurring a 40 percent tax. Uncertainty over the future of the tax code is driving a flurry of activity among those affected, DealBook's Sarah Kessler reports.
The context: Under existing legislation, the lifetime limit on untaxed gifts given over a donor's lifetime or after they die is now nearly $14 million. If Congress doesn't act, it will drop to about $7 million on Jan. 1, 2026.
That expansion potentially saves those planning to transfer a huge amount of money to their families about $2.4 million in taxes -- as long as they give away the maximum $14 million before the provision expires.
What's already a rush of tax planning could become a "tsunami" if the election goes a certain way, Anita Rosenbloom, a partner at the law firm McDermott Will & Emery, told DealBook.
Republicans want to extend all of the tax cuts that are set to expire. Vice President Kamala Harris has said she would push to leave them in place for those making under $400,000. If the parties split control of the White House and Congress, the fate of the gift tax expansion would be less clear.
Some are waiting to see how the election turns out. "If it's going to continue to remain a high exemption, they can put off their decision-making," said Pamela Lucina, who leads Northern Trust's wealth management practice for ultrahighnet worth families.
Rosenbloom said that she's been advising clients to at least lay the groundwork needed to make a big gift, even if they won't decide whether to do so until after the election.
Tax experts have been through this before. In 2012, the gifting limit was about $5 million, and without congressional action, would have shrunk to about $1 million the following year. Lawmakers ultimately moved to extend the higher cap, but tax planners were kept very busy before then.
Today "is sort of like déjà vu," Rosenbloom said, "only the stakes are double."
Exclusive: Bezos leads funding round in robotics A.I. start-up
Among the most highly touted companies in the world of artificial intelligence are those building the increasingly sophisticated software that powers chatbots like ChatGPT or Claude.
But Physical Intelligence, a start-up founded this year, is tackling a different problem -- how to create an operating system for a wide variety of robots -- and has just raised a big new round of financing from major investors, DealBook's Michael de la Merced reports.
Physical Intelligence has raised $400 million in its Series A round, led by Jeff Bezos and the venture capital firms Thrive Capital and Lux Capital. Other investors include OpenAI, Redpoint Ventures and Bond. The new investments value the start-up at $2 billion, not including the new money.
That's significantly more than the $70 million that Physical Intelligence had raised in seed financing in March.
The company wants to make foundational software for any robot, as opposed to creating software for specific machines and tasks. "What we're doing is not just a brain for any particular robot," Karol Hausman, the company's co-founder and C.E.O., told DealBook. Of note is that Physical Intelligence isn't building robots, just the software that powers them.
That requires a huge amount of data on how to operate in the real world -- information sets that largely don't exist now, forcing Physical Intelligence to compile its own. But the company's work has been aided by big leaps forward in A.I. models that can interpret visual data.
Physical Intelligence recently publicized what its model can do. In a paper published last week, the start-up showed off how its software -- called π0, or pi-zero -- enabled robots to fold laundry, bus a table, flatten a box and more.
That said, Physical Intelligence executives say their software is closer to GPT-1, the first major large language model that OpenAI published, than to the brains that currently power ChatGPT. "It's still very far from being ultimately useful," Hausman said. "They're not close to accomplishing these tasks 100 percent of the time."
The field of robotics A.I. is getting crowded, however. A growing array of start-ups are also working on ways to make machines practical in the real world. They include Skild, which is also working on general-purpose robot A.I.; Figure AI, whose backers include OpenAI and Bezos; and Covariant.
Then there's Tesla, though the humanoid robots the carmaker showed off last month were remotely controlled by humans.
The week ahead
What will come first: a Fed rate decision, or the naming of a new president? That question will be front and center this week:
Tomorrow: It's Election Day, and the first results are expected around 7 p.m. Eastern. Elsewhere, investors will be keeping an eye on a Treasury Department auction of 10-year notes. Apollo, Saudi Aramco and Ferrari report quarterly results.
Wednesday: Novo Nordisk, Toyota, Arm, CVS Health and Lyft report earnings.
Thursday: It's decision day, for the Fed and the Bank of England. Fed officials are expected to cut rates by a quarter percentage point. In earnings, Airbnb, Warner Bros. Discovery, Moderna and Tapestry are set to report.
THE SPEED READ
Deals
Stonepeak is said to be in talks to buy Air Transport Services Group, an aircraft leasing specialist, for about $3 billion, including debt. (Reuters)
Blackstone has reportedly emerged as the front-runner to buy the shopping center operator Retail Opportunity, whose market value stands at $3.4 billion. (Reuters)
Elections, politics and policy
"Chinese companies use Biden's climate law to expand their solar dominance" (Politico)
Schneider Electric ousted Peter Herweck as its C.E.O. following a disagreement with the board over growth strategy, and after French regulators fined the company for price-fixing. (Bloomberg)
Best of the rest
Inside Citadel Securities, the trading firm founded by Ken Griffin that handles one in four stock trades and has become a major profit driver for his empire. (FT)
Quincy Jones, the music producer behind "Thriller," the best-selling album of all time, and scores of other hits, died on Sunday. He was 91. (NYT)
"Kay Koplovitz Wants to See More Entrepreneurs Who Look Like Her" (NYT)
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