A divided government could shift the bond market

Marketplace reported that Treasury yields have risen partly because federal debt exceeds $40 trillion, requiring more bond issuance while investor demand has become more saturated. Wharton’s Peter Conti-Brown said investors are charging a larger premium, especially for longer-term bonds. Charles Schwab’s Cooper Howard said divided government could impose fiscal restraint by blocking large spending bills and tax cuts, reducing borrowing. Duke’s Campbell Harvey said lower Treasury yields could lower corporate borrowing costs, consumer loans and mortgages, and Democratic influence over Federal Reserve appointments could support an independent Fed. But failure to fund the government could cause a shutdown and, in an unlikely worst case, default, sending yields higher.

Wyoming voters overwhelmingly rejected a measure that would have cut property taxes by 50 percent. Hank Hoversland of the Wyoming Taxpayers Association said an earlier cut had already contributed to library closures, slower emergency services and difficulty maintaining fire equipment. Florida voters instead approved an exemption covering up to $250,000 of a home’s value, potentially costing county and city governments billions annually. Analysts said Florida could cut spending, raise rates on remaining property or increase other taxes and fees. Higher rates on more valuable properties could shift benefits toward owners of lower-valued homes, as property taxes have risen with post-COVID home values.

Daniela Velasquez de Leon, general manager of San Diego-based Organics Unlimited, said sales were good but bananas’ low margins left little room to absorb rising costs. Corrugated-box prices rose about 10% in Mexico and up to 50% in Ecuador; plastic packaging increased 25%, while fuel raised the cost of transporting fruit, fertilizer and packaging. Because bananas are sold under annual contracts, the company tries to find efficiencies rather than immediately pass costs to retailers, though the industry is warning that logistics costs could threaten future quality and supply. Organics Unlimited is diversifying into papayas and expects to add coconuts. Velasquez de Leon remained optimistic despite uncertainty around USMCA renegotiation and the election.

In Brookwood, Alabama, University of Alabama student Thatcher Rotenberry and conservative resident Rachel Schaefer are working together against as many as three proposed data centers. Rotenberry worries about heat, noise, air and water pollution near his former middle school; Schaefer fears runoff could damage the creek behind her home, where she watches a blue heron. Applied Digital’s Nick Phillips said its reported $3.2 billion project would use forested buffers, would not raise utility rates and would truck coolant off-site. Mayor Joe Barger said there is only one project and defended delayed disclosure, though opponents point to multiple rezoned parcels and a reported $314 million tax break.

U.S. schools serve about 30 million lunches each weekday, but the maximum federal reimbursement is $4.85 per meal and must cover food, milk, produce, labor, equipment and kitchen operations. Austin food-service director Ryan Mikalizak said fruit and vegetable servings rose from roughly 25 cents to 40–50 cents, while grocery prices have climbed 30% since 2020; his district has cut staff and reduced some fruit offerings. Schools also face sodium, sugar, domestic-purchasing and scratch-cooking requirements. More than 55,000 schools use the Community Eligibility Provision, but declining SNAP participation has reduced reimbursements, leading districts in Texas, Illinois and Kentucky to end universal free meals.

The Dow rose 1,569 points, or 3%, to 53,356; the Nasdaq gained 1.4% to 25,736; and the S&P 500 rose 1.6% to 7,688. Tesla fell 3.3% and SpaceX fell 3.9% as investors interpreted the midterm results negatively for Elon Musk’s companies. CVS Health dropped 12.5% after saying it planned to separate from Aetna, the insurer it acquired in a roughly $70 billion merger nine years earlier. Bonds rose, pushing the 10-year Treasury yield down to 4.88%.

ADP reported that private companies added 86,000 jobs in October, essentially unchanged from the previous month, ahead of the federal jobs report due Friday. Transportation, trade and utilities posted the largest gains, while professional and business services lost jobs. ADP also reported that salaries were growing, particularly for people changing jobs, as the number of workers quitting rose.