Geoffrey Smith 

Investing.com — OPEC meets Russia, as the world cries for more energy – but it’s unlikely that Russia will speed up its plans to boost output. According to reports. China Evergrande is still suffering from the effects of one thousand cuts. Tesla (NASDAQ) delivered a record number of units in its quarter, despite the shortage of chips that had hampered many of its competitors. Although stocks are expected to open lower on Friday due to the waning short-covering rally, Merck shares remain strong following positive news regarding its Covid-19 drug. As Democrats move closer to a compromise in key spending bills,  What you need to know for financial markets Monday, October 4th. 

1. 1.

The Organization of Petroleum Exporting Countries meets with key allies led by Russia to review their output policy for November, an event which may well highlight that the world’s biggest energy problems right now are, for once, not really oil-driven.

According to Reuters, sources said that the bloc would continue with the existing efforts to boost output. However it will not do more than that as the current market deficit at over 1 million barrels per hour will be reversed by next year.

The bloc raises output by 400,000 barrels per day from the beginning of every month, until 2020’s emergency output cuts are fully reversed.  U.S. crude oil futures rose over the weekend as more people are concerned about the tightening market. The price of a barrel was $79.74, up 0.2%

2. Evergrande’s Death of 1000 Cuts

China Evergrande, an insolvent real estate firm, was reportedly looking to close another deal for cash. The company is currently struggling with debt repayments and a strict time schedule.

Hong Kong trading in Evergrande stock has been suspended pending the announcement. A local media source claimed that Evergrande is planning to sell 51% of its cash-generative property service unit to Hopson. The structure and price of the deal were not clear.

Evergrande has a $260 million falling due on Monday appears unlikely to meet the obligation, given that it still hasn’t fully paid interest on two bonds that was due over the last couple of weeks.

China’s mainland markets are shut this week for the national week holiday.

3. Stocks to open at a lower level; Merck rallies

U.S. stock markets are set to open lower on Monday, suggesting that the Friday rally that followed Merck’s encouraging news on its experimental antiviral pill for treating Covid-19 was largely short-covering at the end of what was still a down week for the three main indices.

They were 0.3% down at 6:15 am ET (1115 GMT) Futures on Nasdaq 1000 were 0.5% lower.

Merck stock continued to gain in premarket, however, adding another 3.4% to Friday’s 8.4% rise. Joining it in the spotlight later – albeit for less positive reasons – will be 3M, which was served with its biggest compensation demand yet for faulty combat earplugs on Friday.

Data from August factory orders head to a very thin calendar.

4. Dems move closer to compromise over spending bill

After a week of chaos in Washington, the left-wing Democratic Party began to retract their demand for $3.5 trillion and a 10-year extension of the social security net and the energy transition.

Senator Bernie Sanders said over the weekend that he was prepared “to accept there is going to have to be give and take” over the bill, after the more moderate Senator Joe Manchin refused to budge on his $1.5 trillion maximum. Krysten Sinema, a fellow moderate, has also said she won’t support the bill as drafted.

Nancy Pelosi, House Speaker, still wants to link the spending bill with the $1.2 trillion infrastructure plan that has a lot of support from both parties. The President Joe Biden acknowledged last weekend that an agreement on his key economic policies will take more time.

5. 5. Are there chips shortages?

Tesla surpassed the problems plaguing the sector with 241,000 deliveries between July-September. That’s nearly double deliveries in the same period last year, and ahead of the company’s own guidance. Tesla stock rose 2.6% in premarket in response.

The development comes despite the much-chronicled global shortage of semiconductors, and despite the fact that Tesla’s cars embed many more chips than those of legacy carmakers (a point made by long-time Tesla bull Cathie Wood on Twitter (NYSE:)).

General Motors (NYSE 🙂 however, had stated Friday that third-quarter production dropped 33%. The difference in scale between these two companies has sunk dramatically. GM shipped less than Tesla for the first time in history.

Elsewhere in automotive news, Rivian – the electric van company backed by Amazon (NASDAQ:) and Ford – filed to go public.