In a compelling end-of-day update, market watchers are setting their sights on key developments and shifts across various sectors, shaping the outlook for Friday.
President Donald Trump made headlines on Thursday by signaling potential efforts to reduce the price of obesity drugs. This announcement stirred reaction in the market, leading to a notable decline in shares for major drug manufacturers Novo Nordisk and Eli Lilly. Novo Nordisk’s stock dipped nearly 4% in after-hours trading, marking a stark drop of over 50% in the past year. Eli Lilly experienced a similar downturn, falling close to 5% after the news; its shares have decreased by over 13% since peaking in March.
Investors are also keenly watching the biotechnology sector, spurred by insights from Kari Firestone, a notable investor formerly with Fidelity’s biotech fund. During a segment on CNBC’s “Halftime Report,” Firestone highlighted a potential breakout in biotech stocks, suggesting a shift towards more personalized medicine. Investors took notice, with the First Trust NYSE Arca Biotechnology ETF (FBT) gaining 1.25% over four days. The iShares Biotechnology ETF (IBB) increased by 2% during the same period, while the Biotech ETF (XBI) rose by 3%, reflecting strong momentum as October progresses.
In a strategic move, Ark Invest, led by Cathie Wood, acquired shares in major Chinese tech firms Alibaba and Baidu. Baidu’s stock has recently rebounded, climbing 40% over three months but remains 20% off its recent highs, while Alibaba is about 14% away from an Oct. 2 peak and has gained nearly 43% in the same timeframe.
Finance is also in focus, as American Express is set to report earnings on Friday morning. The company’s shares have risen 3.6% since its last report three months ago, although they are 7.5% away from the September high.
Market trends in the bond sector are also noteworthy, as the 10-year Treasury yield fell below 4% for the first time, while other yields, such as the 2-year at 3.42% and the 3-month at 3.94%, are being monitored closely. High-yield bond ETFs are showing promising yields, with the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) at 5.72%, the SPDR Bloomberg High Yield ETF (JNK) at 6.58%, and the iShares 0-5 Year High Yield Bond ETF (SHYG) yielding 7.06%.
Regional banks are facing challenges, as the SPDR S&P Regional Bank ETF (KRE) has declined for four consecutive weeks and is currently 17% off from its 52-week high. It has decreased 9% over the past month. Several banks, including Ally Financial, Comerica, Fifth Third, Huntington Bancshares, Regions Financial, and Truist, are set to report earnings on Friday, each experiencing varying degrees of declines in their stock prices over recent months.
On a brighter note, gold prices continue their upward trajectory, reaching new highs and experiencing one of its best weeks since March 2020, attributed to strong demand and market dynamics. The VanEck Gold Miners ETF (GDX) has surged by 11.7% within just five days, benefiting from the metal’s bullish momentum.
As these developments unfold, investors will be keeping a keen eye on market responses and potential shifts heading into the trading session on Friday.
