October Starts Positive

Photo by Debby Hudson on Unsplash

Today the stock market rallied because Merck MRK found a pill to treat covid-19 without needing hospitalization and with very low death risks. Merck shares rose nearly 10%.

Other drug firms moved depending on how they were likely to be affected by the Merck breakthrough. Winners included Zymeworks ZYME, Compugen CGENCosan CSAN, Roche RHHBY. Losers included Vir of San Francisco and (mysteriously) BioNTech BNTX, which reported that it had a new drug to treat post-surgery patients who had colorectal cancer, BNT 122. The share fell 7%.

Japan went the way of Europe after its success in Sept. with a generalized correction that took down Nintendo and Fanuc. NTDOY also was sold off by Cathie Woods who has a following and was down 5.65%.

Some gainers included NIO which thanks to its new Norwegian presence delivered 10,628 vehicles last month, up 126% y/y and also beating forecasts. Other winners were mostly from the oil patch: BP, Royal Dutch Shell, Azure Power, Earthstone Energy (ESTE), and Canadian Solar CSIQ which recovered today. However, UUUU, volatile Energy Fuels, lost 0.85%

Gold is up again.

Canadian Nutrien NTR was given a new higher TP for Q3, at $1.189 (US), and rose 2.7% to $64.83, a pe ratio of 38.36. For me, that is near a sell signal. Sure food prices are rising but the hike will limit how much people will buy.

Fund managers like Lazard, LAZ, and Sweden's Investor, IVSBF were buoyant as were country funds like Ireland IRL (I am not sure if either counts as part of Europe to Merrill but I think they are there.) Banco Latino (BLX) gained 1.6% to $17.54.

A lot of these moves are simply reactions to last month's excesses and they may not be predictive for October at all.

Thanks to the Institute for Supply Manufacturing showing a nice rise in September, today the Dow Jones gained 250 points.

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