U.S. stock index futures are pointing to a strong opening on Wall Street after the baseline consensus forecast for U.S. midterm elections proved correct as Democrats won control of the House, while the GOP hung on to the Senate. History has shown that mixed party control is generally the best combination for equity markets, while the highest-growth stocks can keep putting up terrific numbers even during an economic slowdown. Democrat-friendly sectors, like the biotech cohort which runs counter to Big Pharma, could also get a boost.

Economy

The midterm results dim chances for any major fiscal initiative from the Trump administration that might have boosted yield gains and a stronger greenback. The market also remains under pressure from this week’s record volumes of longer-dated government debt supply. As a result, the yield on the benchmark 10-year Treasury slipped 3 bps to 3.18%, off its seven-year high of 3.26% touched a month ago, while the dollar index fell 0.6% to below 96.

Gridlock in Washington could also stall the White House's bid to deregulate banking and financial services. Representative Maxine Waters, a fierce Trump critic and Wall Street foe, appears poised to take control of the House's powerful financial services committee. The halt of deregulation legislation could also affect other sectors like energy, industrials and small business.

Midterm highlights: Outspoken pro-Trump Republican Ron DeSantis has won the race for governor in Florida, triumphing over Tallahassee Democratic Mayor Andrew Gillum in one of the most closely watched elections in the country. Beto O'Rourke failed in his bid to unseat Ted Cruz from a key Texas Senate seat, while 29-year-old Alexandria Ocasio-Cortez made history in New York's 14th District, becoming the youngest woman ever elected to Congress.

"We have to protect ourselves with respect to China, Russia and even the USA," French President Emmanuel Macron told French radio, calling for the creation of a "true European army." It comes after President Trump pulled out of the 1987 INF Treaty and demanded more NATO spending from European countries. The EU launched an annual €5.5B joint defense fund last year, and added another €13B in June to support development of new military technology.

Reserve Bank of India Governor Urjit Patel could resign at the central bank's next board meeting on November 19, according to online financial publication Moneylife. At issue are pressing demands by the government for the RBI to relax lending curbs and hand over "excess" reserves to shore up public finances. A resignation could create uncertainty and undermine India's already-weak financial markets.

Stocks

Big Oil is celebrating big midterm wins as voters rejected measures that would have restricted drilling in Colorado and put a tax on carbon emissions in Washington. Oil companies had spent tens of millions of dollars to oppose the initiatives, with shares of Colorado producers - Noble Energy (NYSE:NBL), Anadarko Petroleum (NYSE:APC) and Devon Energy (NYSE:DVN) - under pressure since the proposal won a spot on the ballot. Colorado is the fifth-largest U.S. oil producing state.

Efforts to legalize recreational marijuana use saw mixed results. While voters in North Dakota blocked a proposal to permit the drug, Michigan became the 10th U.S. state to legalize recreational pot use. Its proposal also levies a 10% tax on sales, ushering in a new era of cannabis law and a burgeoning weed industry.

After rallying yesterday, shares of gun makers are on watch again this morning as investors reassess what a greater showing of Democrats in Congress could mean for stricter gun control. The midterms also saw several ballot measures to further regulate firearms. Washington state voted to introduce enhanced background checks, waiting periods and increase the minimum age to buy a semiautomatic rifle to 21. Related tickers: AOBC, RGR, OLN, SPWH, VSTO

Alphabet's Healthcare Workshop is kicking off at its Sunnyvale campus amid the company's growing interest in the space. It will convene employees from life-sciences R&D arm Verily, health-focused AI project Google Brain, anti-aging research division Calico, the Google Fit wearables team and home automation group Nest. The conference is one of the first times Alphabet (GOOG, GOOGL) has arranged a gathering for its many health groups, which are spread out across the organization.

Electronics manufacturer Foxconn has denied reports that it's planning to bring in engineers from China to help staff a large factory under construction in Wisconsin, which was heralded by President Trump as a major "jobs investment." The rumor referenced the state's tight labor market, though Foxconn (OTC:FXCOF) said its "Wisconsin first commitment remains unchanged." Skilled labor appears to be a problem nationwide, with Amazon (NASDAQ:AMZN) scuttling its original plan to pick a single location for HQ2.

Driving new levels of network performance as China transitions toward 5G, Nokia (NYSE:NOK) has signed frame deals with China Mobile (NYSE:CHL), China Telecom (NYSE:CHA) and China Unicom (NYSE:CHU) worth more than €2B. The agreements include deliveries of 4G radio and fixed access equipment, IP routing and optical transport devices, as well as other services, through next year. NOK +2% premarket.

Tencent is the next tech giant to build out its self-driving car operations in Palo Alto, California, joining a crowded field of corporations vying for talent in the heart of Silicon Valley. According to Chinese state news agency Xinhua, Tencent (OTCPK:TCEHY) already got the green light in May from the southern city of Shenzhen (where it is headquartered) to test autonomous vehicles on some public roads.

Automation continues to evolve the grocery sector, with Ahold Delhaize (OTCQX:AHODF) computerizing order collection at mini "robot supermarkets" attached to the stores of its U.S. chains like Stop & Shop. Teaming up with startup Takeoff Technologies, the condensed supermarkets can supply several locations with click-and-collect online orders. They cost about $3M to build, which Takeoff says is less than the cost of a typical store revamp.

Looking to pay down its debt load, Kraft Heinz (NASDAQ:KHC) is selling its Canadian natural cheese business to Italian dairy group Parmalat (OTCPK:PLATF) for C$1.62B. The deal comes a month after the new United States-Mexico-Canada Agreement was signed, under which Canada opened up its protected domestic market to the U.S. Ottawa has promised to fully compensate farmers for any losses.

According to Reuters, Boeing (NYSE:BA) will send a bulletin to 737 MAX jet operators as soon as today advising them of a procedure for dealing with erroneous cockpit readings. It centers on the "angle of attack," which is the angle of the wing relative to oncoming air stream, a measure that indicates if a plane is likely to stall. The advice is based on preliminary information gathered from the Lion Air flight that crashed in Indonesia last week.

The Russian-Chinese joint venture developing a new long-haul jet to challenge Boeing's 787 (BA) and Airbus's A350 (OTCPK:EADSY) is shopping around for engines. It will make a decision between General Electric's (NYSE:GE) GEnX and Rolls Royce's (OTCPK:RYCEY) Trent 7000 engines by the first half of next year, according to its chief designers. Eventually the CR929 intends to use a Sino-Russian engine which is currently under development.

Tuesday's Key Earnings

ADM (NYSE:ADM) -1.6% despite bottom line improvement.
Bausch (NYSE:BHC) +4.5% continuing an organic growth streak.
CVS Health (NYSE:CVS) +5.7% ready for Aetna acquisition.
Devon Energy (DVN) -1.8% AH as production slipped.
Eli Lilly (NYSE:LLY) -3.9% following a mixed report.
Emerson Electric (NYSE:EMR) +0.3% topping expectations.
Etsy (NASDAQ:ETSY) +13% AH posting strong growth.
GoDaddy (NYSE:GDDY) -2.3% AH raising its outlook for 2018.
LendingClub (NYSE:LC) +4.4% AH increasing guidance.
Papa John's (NASDAQ:PZZA) +3.3% AH on smaller comp sales decline.
Regeneron (NASDAQ:REGN) +0.8% updating its growth prospects.
Twilio (NYSE:TWLO) +14% AH on Q3 beats and upside guidance.
Wendy's (NYSE:WEN) -5.7% AH amid weaker N.America sales.
Zillow (NASDAQ:Z) -18.4% AH cutting its revenue forecast.

Today's Markets

In Asia, Japan -0.1%. Hong Kong +0.1%. China -0.7%. India +0.1%.
In Europe, at midday, London +1.2%. Paris +1.3%. Frankfurt +0.9%.
Futures at 6:20, Dow +0.7%. S&P +0.9%. Nasdaq +1.2%. Crude +1% to $62.85. Gold +0.7% to $1235.40. Bitcoin +0.9% to $6521.
Ten-year Treasury Yield -3 bps 3.18%

Today's Economic Calendar

FOMC meeting begins
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
1:00 PM Results of $19B, 30-Year Note Auction
3:00 PM Consumer Credit