Stocks rose across the board Monday as the S&P 500 and Dow finished near record highs.
Tesla's (TSLA) Technoking Elon Musk was dealt several wins Monday. For starters, car rental company Hertz (HTZZ) helped Tesla surpass $1 trillion in market cap after Hertz ordered a 100,000 Teslas to be delivered over the next 14 months which will allegedly amount to about $4.2 billion in revenue for Tesla. Meanwhile, Musk’s “Boring Company”, which famously sold flame throwers, earned a deal to create more tunnels under Las Vegas called the “Vegas Loop”.
Investors started the day reacting to earning reports, including Kimberly-Clark (KMB) and MagnaChip Semi (MX). Personal care company Kimberly-Clark beat earnings and revenue estimates but fell more than 3% during the day after the company lowered its guidance below consensus estimates for the second consecutive quarter due to inflation and supply-chain issues. Kimberly-Clark now expects EPS for the year to land in the range from $6.05-6.25 per share, below consensus estimates for $6.70 per share.
Meanwhile, semiconductor company MagnaChip Semi beat earnings and revenue estimates. MagnaChip’s performance was attributed to higher gross profit margins that were supported by “an increase in average selling price under a favorable pricing environment” and strong demand across end markets.
Tech Giants
Tech giants are up to bat this week for earnings, with investors eyeing the space for insight into how these companies navigated the slowed growth reported last quarter, as well as continued supply chain disruptions, labor shortages, and material and chip shortages.
Facebook (FB) is the leadoff hitter this week, reporting after market close today. Alphabet (GOOG), Twitter (TWTR), and Microsoft (MSFT) follow suit, reporting after close Tuesday. Lastly, Amazon (AMZN) and Apple (AAPL) report after the close on Thursday.
These companies all report on the heels of a Snap (SNAP) earnings report that sent fellow social media giants lower. Snap beat earnings and revenue estimates but was forced to lower fourth-quarter guidance due to changes in Apple’s privacy settings that changed data tracking to an opt-in ordeal, rather than an opt-out one, which is making targeted ads less effective. In addition to that, Snap said global supply chain disruptions and labor issues could be contributing to companies spending less on ads.
Looking ahead this week, investors will be watching out for reiterations of both the issues that arose in Snap’s earnings but will be primarily concerned with the iOS change’s effects on Facebook, Google, and Twitter’s earnings, though consistent notes on changes in demand for ads will only compound those fears.
For Apple and Amazon, investors will be focusing more on the damages that supply chain disruptions and changes in forecasts. Apple is already expected to cut iPhone 13 production by 10 million phones due to chip shortages, so any deviation from that on the high and low end will certainly catch the attention of investors.
Meanwhile, Amazon investors will be looking to uncover how port-congestion, rising labor costs, and supply chain disruptions will affect its third-quarter report, as well as being on the lookout for any decreased or slowing demand for Amazon Web Services. The holiday season is practically here as far as Amazon is concerned, which should come with robust demand for the company, however hangups at the port and in supply chains could limit Amazon’s ability to stockpile the necessary inventory needed for the holiday season as other businesses fail to deliver to Amazon warehouses in a timely manner.
Consumer Confidence and Personal Income and Outlays
While earnings reports are aplenty this week, the economic calendar is has some important reports as well.
Consumer Confidence is expected at edge lower in October to a reading of 108.0 from 109.3 in September Tuesday morning. If accurate, this would mark the fourth straight decline in consumer confidence, but would be at a significantly lower rate of decline than experienced in the previous two months.
Another headline report this week comes Friday morning, with the BEA’s Personal Income and Outlays report. In the previous report, real disposable personal income declined 0.3% as the personal savings rate fell to 9.4%, underscoring how inflation is chipping away at the consumer’s ability to spend. For the September report due this Friday, Core-PCE prices are expected to edge lower to 0.2% from 0.3% in August, while Personal Spending is expected to rise 0.4% from 0.8% in August, and Personal income is expected to decline 0.2% following a 0.2% rise in the previous month.
Economic Events this Week
Tuesday
- 10:00 a.m. - New Home Sales
- 10:00 a.m. - Consumer Confidence
Wednesday
- 8:30 a.m.- Adv. Retail Inventories
- 10:30 a.m.- EIA Crude Oil Inventories
Thursday
- 8:30 a.m. - Initial & Continuing Claims
- 10:30 a.m.- GDP-Adv.
Friday
- 8:30 a.m. - Personal Income and Spending
- 8:30 a.m. - PCE Prices and Core PCE Prices
Earnings Reports This Week
Tuesday:
Before the bell:
CNC, UPS, GE, ADM, LMT, RTX, NVS, MMM, UBS, LLY, SHW, PCAR, WM
After the bell:
GOOG, MSFT, CB, COF, V, CHRW, TXN, AMD, PFG, AMP, NCR, FBHS
Wednesday:
Before the bell:
ALKS, APH, AIT, ARES, ADP, AVY, BXMT, BA, BSX, BCO, BMY, BG, CAMT, CHEF
After the bell:
F, MOH, FLEX, AFL, CTSH, MUSA, PPC, ORLY, CYH, RE, WFG, URI, RJF, YUMC
Thursday:
Before the bell:
CMCSA, RDS.A, BUD, CAT, MRK, SNY, NOC, LIN, CBRE, PBF, MO, CARR, MA, AEP, SWK
After the bell:
AMZN, AAPL, SBUX, GILD, X, AVT, HIG, WDC, SYK, FE, DVA, MHK, RSG, EMN, LPLA
Friday:
Before the bell:
XOM, CVX, PSX, ABBV, CHTR, LYB, IMO, GT, CL, GWW, NWL, AON, WY, FTS, BAH
Sector and Industry Sentiment
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