On Friday stocks rallied lowering the weekly losses after investors got some good news: a government shutdown was averted, and there’s new hope in the battle against Covid-19, with a promising antiviral pill from Merck potentially cutting hospitalizations by 50%. During the last week the large-cap benchmarks and Nasdaq Composite index recorded their biggest weekly drops since February and rounded out the worst monthly declines since the onset of the pandemic, seemingly weighed down by inflation and interest rate fears. The S&P MidCap 400 and small-cap Russell 2000 indexes ended with only modest losses. Declines within the S&P 500 were broad-based, with only energy shares notching a gain. Growth stocks fared worse than value shares, which was mirrored in the underperformance of the technology-heavy Nasdaq Composite Index.

Top Sectors last Week:

  • Energy Sector (ETF: XLE) up 7.12%


Losers last week:

  • Health Care Sector (ETF: XLU) down 3.52%
  • Information Technology Sector (ETF: VGT) down 2.81%
  • Consumer Staples Sector (ETF: XLP) down 2.27%


Interesting News:    

  • Infrastructure – House Speaker Nancy Pelosi promised to move ahead with a vote on a $1.2T bipartisan infrastructure bill before Democrat progressives said they have the numbers to stall it. They want the Senate to agree to a separate $3.5T social spending and climate policy package (or what the White House terms “human infrastructure”) before pressing ahead on this front. Negotiations are still ongoing, but the developments have the potential to dent some sentiment in the market, especially infrastructure-related names, since the bill was a key part of Biden’s economic agenda. Investors trying to get exposure to companies that might benefit from Infrastructure bill can look at Global X U.S. Infrastructure Development ETF (Ticker: PAVE).
  • General Motors (NYSE:GM) hosts analyst day –  as it talks up its electric vehicle momentum.  GM stock has lagged behind the market for months, and Citigroup says it knows what will break shares out of their doldrums. General Motors  (ticker: GM) is hosting an analyst event on Oct. 6 and 7. Citigroup analyst Itay Michaeli believes it could help start the stock on its path to $100 a share. That would be an increase of almost 100% from recent levels, with the stock trading around $52 on Friday.
  • EV maker Polestar strikes $20-bln deal with Gores Guggenheim SPAC – Swedish electric-car maker Polestar said on Monday it will go public by merging with a U.S.-listed blank-check firm backed by billionaire Alec Gores and investment bank Guggenheim Partners at an enterprise value of $20 billion. Polestar is a Swedish automotive brand established in 1996 by Volvo Cars’ partner Flash/Polestar Racing and acquired in 2015 by Volvo. The company, which delivered about 10,000 vehicles last year, said it expects to sell about 290,000 vehicles per year by 2025 and plans to launch three new models by 2024. Polestar also counts Hollywood actor Leonardo DiCaprio among its investors. Investors interested in Polestar can gain exposure to this company by investing in Gores Guggenheim Inc Spac  (Ticker: GGPI).
  • Netflix Acquires its First Video Game Development Company – According to a report published by StreetInsider.com, Netflix (NFLX) has made a foray into the video game development space by acquiring California-based independent video game development company Night School Studio for an undisclosed amount.  The deal is a part of Netflix’s plan to develop video games and offer them in its subscription plans with no in-app purchases or advertisements. The Vice-President of Game Development at Netflix, Mike Verdu, said, “We’ll continue working with developers around the world and hiring the best talent in the industry to deliver a great collection of exclusive games.”

Calendar:

Next week’s highlights include September jobs data on Friday, October 8th. The debt ceiling and infrastructure talks out of DC will continue to be front and center next week amid more hints that ratings agencies could take the U.S. credit rating down a notch if the drama continues. Economic reports due out include updates on factory orders, the trade balance and consumer credit before the September jobs report blows in at the end of the week.


Earnings This week:

Monday, October 4: The Duckhorn Portfolio (NAPA).

Tuesday, October 5: PepsiCo (PEP) and Loop Industries (LOOP).

Wednesday, October 6: Acuity Brands (AYI), Constellation Brands (STZ) and Levi Strauss (LEVI).

Thursday, October 7: ConAgra (CAG), Tilray (TLRY) and Lamb Weston (LW).


IPO’s this week:

IFit Health & Fitness (IFIT) is expected to start trading on October 6, while Life Time Group (LTH) and Cingulate (CING) are set to debut on October 7.