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Big Week for FAANG, Economic Reads

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Monday, October 25, 2021

Much excitement comes to Wall Street this week, with calendar Q3 earnings reports expected from Facebook (FB - Free Report) , Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Apple (AAPL - Free Report) , among others. We’re now deep in the heart of earnings season, and pre-market activity is cautiously optimistic: the Dow is +25 points, the S&P 500 +5 and the tech-heavy Nasdaq, which houses the FAANG stocks, is +45 points at this hour.

We also see a bevy of new economic prints this week, although there is nothing major on the docket for today. These include Case-Shiller home prices, Consumer Confidence, New Home Sales, Durable Goods, Q3 GDP, Personal Income/Consumer Spending and Jobless Claims. Combined with Q3 earnings reports, the Fed will be well equipped with information on which to decide monetary policy when its next meeting convenes next week.

Facebook will be the first of the FAANG stocks to report, after the closing bell today. Accompanying these numbers today are a series of media reports regarding internal dissent among company operatives, part of which we saw in the testimony of whistleblower Frances Haugen a couple weeks ago. Right now, the Zacks Rank #3 (Hold)-rated company is expected to bring in $3.20 per share on $29.55 billion in revenues.

Consumer staples major Kimberly-Clark (KMB - Free Report) posted mix results this morning on its Q3 earnings, with $1.39 per share well off the $1.66 per share pace expected by analysts. This marks the third straight bottom-line miss for the parent of Huggies, Kleenex and many other commercial paper products. Revenues came in a hair above expectations, to $5.01 billion in the quarter.

In today’s pre-market, Kimberly-Clark shares are down -3% on this news. Partly this is due to a ratcheting down of full-year earnings expectations, now to a range of $6.05-6.25 per share. The Zacks consensus previously had been $6.65, so expect downgrades on the bottom line here, and perhaps a lowering of the Zacks Rank as a result.

Moderna (MRNA - Free Report) has released a positive study regarding efficacy of its Covid vaccine in children 6-11 years of age. Two half-dose shots given four weeks apart was said to have given a favorable safety profile. An FDA submission is forthcoming. The FDA will hold a hearing this week on the Pfizer (PFE - Free Report) /BioNTech (BNTX - Free Report) clearance for use in children. Shares of Moderna are up modestly on the news, but down big over the past month.

Getting back to the markets, the S&P 500 so far is +5.5%, and on pace for its strongest full month since November 2020. The Dow, notching a new closing high Friday, is +5.4% for the month of October so far — its strongest performance since March of this year. This week’s FAANG stocks will articulate plenty of what’s going on at the Nasdaq, and whether that index may shoot for fresh all-time highs in the near future itself.

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