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Ahead of Wall Street

Where to start" The biggest of the Big Tech companies are all reporting earnings Thursday after the close of regular trading. Based on market cap, this is the biggest day of Q3 earnings season (not all are reporting for Q3), though the biggest of the big — Apple — always waits to make its appearance. Let’s check the others first:

Amazon AMZN posted a big beat on its Q3 bottom line: $12.40 per share was miles ahead of the $7.30 expected, and nearly 3x the year-ago earnings number of $4.23 per share. Revenues also posted a solid outperformance, with $96.2 billion in the quarter beyond the $92.9 billion analysts were looking for. Sales growth rose 37% in the quarter. Both North America and International sales were slightly above estimates. AWS cloud business was in-line with estimates at $11.6 billion, while Operating Cash Flow was up 56%.

Guidance for Amazon’s all-important holiday shopping season Q4 took a big step up, now expecting $112 billion - $121 billion next quarter. Operating income guidance was down, however, which must be the main reason shares are trading down more than 1% on the news. Then again, this is what can happen when your stock is up 70% year to date, even after Wednesday’s big sell-off. For more on AMZN’s earnings, click here.

Alphabet GOOGL also blew the doors off EPS estimates, to $16.40 per share versus $11.40 expected, with $46.17 billion in sales far outpacing the $35.36 billion consensus. YouTube new adds brought in $5 billion for the quarter, while its Cloud business came in at $3.44 billion, ahead of the $3.22 billion expected. Shares have shot up 7.5% on the earnings report; Alphabet had been lagging its Big Tech counterparts a bit previously. For more on GOOGL’s earnings, click here.

Facebook FB also surpassed expectations on its top and bottom lines: $2.71 per share on $21.47 billion beat the $1.94 per share and $19.89 billion in revenues. The social media staple’s EPS swung to a positive from expectations year over year. Daily and Monthly Active Users (DAU & MAU) came in slightly lower than anticipated, which the company expects to continue into Q4; its Q2 adds were tremendous during the heart of the “shelter in place” period of the pandemic. For more on FB’s earnings, click here.

Stepping out of Big Tech a moment, Starbucks SBUX surprised to the upside in what was expected to be a pull-back quarter as pandemic conditions have wreaked havoc on foot traffic. Earnings of 51 cents per share beat the 33 cents in the Zacks consensus, with $6.2 billion in sales topping the $6.08 billion we were looking for. Both figures are still down year over year. Same-store sales were down in the U.S., International and Chinese markets, but all performed better than expected. For more on SBUX’s earnings, click here.

Apple AAPL shares are down 4% in late trading upon its fiscal Q4 earnings release: 73 cents per share amounts to a 4-cent beat on the consensus estimate, with $64.7 billion beating estimates of $63.4 billion. However, lower-than-expected iPhone sales in the quarter — 26.4 billion units, versus 27.9 billion anticipated — are hitting the stock after hours.

Gross Margins of 38.2% were even, with Services better than expected at $14.5 billion. Mac and iPad sales were relatively in-line. However, the company gave no guidance for fiscal Q1. For more on AAPL’s earnings, click here.

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Earnings and Economic News

Key Earnings Reports For Oct 29, 2020

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(+) Federal Funds Rate - Oct 29, 2020 4:15 PM Eastern Time
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(+) Chain Deflator- Advance Estimate - Oct 29, 2020 --
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(+) Disposable Personal Income - Oct 29, 2020 --
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(+) Exports - Oct 29, 2020 --
(+) GDP Advance Estimate - Oct 29, 2020 --