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Markets, Q2 Earnings Mixed: Facebook, Qualcomm, Ford Beat

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Markets were mixed in regular Hump Day trading today, with the Dow selling off -0.37%, or 128 points, while the S&P 500 was barely negative at -0.02% to 4400 points. By contrast, the Nasdaq rose 102 points, +0.70% on the day ahead of key earnings reports after the bell, while the small-cap Russell 2000 gained +1.51% on the day, outshining the rest of the field.

Fed Chair Jay Powell followed up the monetary policy body’s latest decision not to begin tapering asset buybacks, let alone raise interest rates, with a press conference where he articulated the Fed’s position. While saying we were “some way away from… substantial further progress toward… maximum employment,” he said “there is little support (from the Fed) for tapering mortgage-backed securities before Treasurys.” Basically, no change; carry on as before.

Facebook (FB - Free Report) reported Q2 earnings after today’s closing bell with beats on both top and bottom lines, even as shares fell 5% on the news. Earnings of $3.61 per share bettered the $3.03 in the Zacks consensus — and more than doubled its year-over-year $1.80 per share — on revenues of $29.08 billion, above the $27.93 billion expected, which itself was almost 50% growth from a year ago.

Daily Active Users (DAU) were in-line at 1.91 billion, but the dip in share price on the news has to do with Q3 and Q4 guidance in ad revenues expected to “decelerate significantly” from Q2’s +47% average price per ad. The company is pricing in a post-pandemic economy without the captive users Facebook had enjoyed over the past year and a half. Shares are still up 38.8% year to date, and losses in late trading have pared to -3.5%.

Qualcomm (QCOM - Free Report) outperformed estimates in both earnings and sales in its fiscal Q3, with $1.92 per share easily surpassing the $1.67 expected (and 86 cents from the year-ago quarter) on $8.00 billion in revenues. Its chip business grew at a $10 billion annual revenue pace, with auto chip revenue +83% year over year.  Next quarter guidance was raised to $2.15-2.35 per share and $8.4-$9.2 billion on the top line.

PayPal (PYPL - Free Report) shares dropped more than -7% upon its latest quarterly report, in which earnings eked out a 2-cent beat to $1.15 per share and revenues dropped to $6.42 billion from $6.32 billion expected. Payment volume grew 40% year over year, though negative effects from the loss of eBay has caused guidance for both next quarter and the full year to have pulled back from earlier expectations.

Ford (F - Free Report) also reported earnings after the bell, swinging to a +13-cent profit from an expected -11-cent loss on revenues of $24.13 billion, which outpaced the $21.50 in the Zacks consensus. Further, the company guided that the all-electric F-150 Lightning now has more than 120K pre-orders. Shares are up 3% on the earnings release; Ford stock has already gained a highly impressive +62.7% year to date.

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