Market Talk – Monday Morning Market Memo – October 4, 2021

Market Talk – Monday Morning Market Memo – October 4, 2021

Good morning,

The stock market had a nice rally to start October, with the Dow Jones Industrial Average gaining nearly 500 points (1.4%) last Friday, and the Standard & Poor’s 500 Index rallying 1.2 percent.  The major contributor to Friday’s gain was news from Merck and their partner Ridgeback Biotherapeutics – announcing their experimental antiviral pill for COVID-19 reduced the risk of hospitalization or death by 50% for patients with mild or moderate cases.

Merck, which is a Dow component, jumped over 8% on the news.  The company is planning to seek emergency authorization for the treatment.  Despite the promising report and rally to end last week’s trading, the major stock market averages still finished in negative territory for the week as a whole.  In total last week – the Dow lost 1.4% to 34,326 – the Standard & Poor’s 500 Index declined 2.2% to 4,357 – and the NASDAQ Composite dropped 3.2% to 14,566.

September as a whole was a down month for stocks – the Dow fell 4.3% – the S&P 500 lost 4.8%, snapping a seven-month winning streak – and the NASDAQ Composite shed 5.3%, posting its worst September in a decade.  Factors behind the September decline included a spike in COVID cases, the likely upcoming reduction in Federal Reserve monetary stimulus, mixed economic data, China headwinds, supply chain bottlenecks, inflation worries, and profit-taking after a nice run up in the market.

Looking to the week ahead, we’ll get the widely followed and often market moving Jobs Report from the United States Department of Labor for September.  Market expectations are that the economy added about 425,000 jobs in September, with the unemployment rate improving a notch to 5.1 percent.  Also this week, we’ll get a small taste of earnings reports, with companies including PepsiCoConstellation Brands, and Conagra Brands scheduled to announce their numbers.  Earnings Season “officially” kicks off next week, when several of the major banks will be reporting results.

All the best – Southport Station Financial Management, LLC