Stocks Extend Side, Pelosi Seeks Mulligan -5 Things You Must Know

On Oct 1, 2021

Here are five things you must know for Friday, October:

1. — Stock Futures Extend Slide Into October As Inflation, Energy and Fed Concerns Linger

U.S. equity futures extended declines Friday, following on from the worst month for tech stocks since the peak of the pandemic, as investors enter the final quarter of the year focused on inflation, energy markets and the Federal Reserve.

Soaring energy prices, exacerbated by a power crisis in China that has spilled over into markets all around the world, supply chain disruptions that are triggering profit warnings across several corporate sectors and wage increases linked to a record labor market shortage have lifted by benchmark Treasury bond yields and boosted inflation forecast, each of which have acted as a breaker on U.S. equity markets.

Investors will get a glimpse of that impact later this morning with the August reading of Fed’s preferred measure of inflation, the PCE Price Index, while laying the groundwork for next week’s jobs report and the start of the third quarter earnings season.

On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a 175 point opening bell decline to kick-off the month of October after the biggest monthly percentage drop for the 30-stock average since September of last year.

The broader S&P 500, which notched a modest 0.23% third quarter gain despite the worst month of declines since March of 2020, is priced for a 21 point decline. Nasdaq Composite futures, meanwhile, are set for a more modest 60 point pullback as benchmark 10-year note yields fell below 1.5% in overnight trading amid weaker-than-expected factory activity data from Asia.

2. — House Speaker Pelosi Delays Infrastructure Bill Vote, Looks For Friday Mulligan

House Speaker Nancy Pelosi will once again attempt to bridge the gap between progressive and moderate Democrats Friday as she moves to pass a $1 trillion infrastructure bill that has divided the party for months.

After failing to reach an agreement among Democratic lawmakers last night, with progressives opposed to supporting the bill unless it’s linked to the broader $3.5 billion budget reconciliation package of spending initiatives that form the framework of President Joe Biden’s economic agenda, Pelosi may regroup for a Friday vote

“We’ll see,” Pelosi told reporters late Thursday. “The plan is to bring the bill to the floor. One hour at a time.”