Facebook Inc. 3Q results.
Stock futures edged up ahead of a big week of earnings from
major technology companies.
Facebook is scheduled to report third-quarter results Monday
after markets close. Microsoft, Twitter and Alphabet, Google's
parent company, are scheduled for Tuesday. Apple and Amazon.com are
expected to report later in the week.
Strong earnings from banks, consumer companies and manufacturers
have sent stocks higher over the past week and soothed investors'
concerns that higher inflation and labor shortages could erode
"One of the more notable takeaways from the earnings reports
seen so far has been the ability of companies, for the most part,
to pass on increases in prices onto their customers without seeing
a drop in sales, " said Michael Hewson, chief markets analyst at
Disappointing results last week from social-media company Snap,
which warned that tougher privacy rules from Apple would likely
crimp its advertising sales, could be a "canary in the coal mine
for the rest of the tech sector," Mr. Hewson said. Should the tech
giants reporting earnings this week also post dour outlooks, it
"could see the mood sour quite quickly."
A key question remaining is how global central banks will
respond to rising prices. Recent trading in short-dated U.K. gilts
suggests investors think the British government may raise interest
rates as soon as November. Investors await comments from the
European Central Bank and the Bank of Japan, which both have
meetings scheduled this week. The Federal Reserve has signaled a
possible rate increase next year.
Money managers are also closely watching negotiations among U.S.
lawmakers about the fate of President Joe Biden's sweeping
social-policy spending package. House Speaker Nancy Pelosi said
Sunday that she was optimistic an agreement could be reached this
week on the framework for the legislation, and a vote on a separate
infrastructure funding bill.
Government spending on that scale "will continue to support
growth," said Esty Dwek, chief investment officer at Swiss online
bank FlowBank. "The question now is more about taxes and how they
will pay for it."
Overseas, the pan-continental Stoxx Europe 600 was relatively
flat Monday. Among European equities, HSBC rose 0.8% after it
reported a jump in third-quarter profit and said it would spend up
to $2 billion on stock buybacks. UniCredit declined 2.2% after
talks with the Italian government to acquire nationalized lender
Monte dei Paschi collapsed. In Asia, major benchmarks were
The dollar has derived little support from higher U.S. Treasury
yields so far in October due to reduced safe-haven flows and a
similar rise in yields in other G10 economies, MUFG Bank said.
"As a result yield spreads have not moved decisively in favor of
the U.S. dollar," MUFG currency analyst Lee Hardman said. "The case
for a stronger U.S. dollar is more compelling against the low
yielding G10 currencies of the EUR, CHF and JPY where market
participants are more comfortable that their domestic central banks
will keep rates low despite higher inflation."
Bitcoin rose 1.9% Monday above its level at 5 p.m. ET Friday,
trading around $61,900. The cryptocurrency has wavered after it
cleared $66,000 to hit a new all-time high last week.
The Turkish lira depreciated 1.8% to its weakest level on
record, trading at 9.8 lira to the dollar Monday, after President
Recep Tayyip Erdogan threatened to expel the U.S. ambassador and
top diplomats from nine other Western countries over the
The yield on the benchmark 10-year Treasury note ticked up to
1.661% Monday from 1.654% on Friday.
Pimco sees risks of central banks raising interest rates in the
short term as economies continue to recover, said Joachim Fels,
global economic advisor at the asset manager. Over a longer-term
horizon, however, it expects interest rates to remain relatively
low and range-bound, with lower but positive returns for core bond
"We think it makes sense to seek to maximize the opportunity in
traditional fixed income strategies with flexible mandates," he
The European Central Bank is likely to use this week's meeting
to cast doubt on the bond market's pricing of interest-rate rises
before the end of 2022, said TD Securities.
President Christine Lagarde may echo recent comments by ECB
chief economist Philip Lane that the ECB's forward guidance is
clear and implies that interest-rate rises remain years away, said
"Thus President Lagarde is likely to use her podium to push back
verbally on yields to the best of her ability," TD Securities
The question remains how much emphasis the ECB will put on
pushing back against market interest-rate expectations, however, it
Oil prices rose, with comments from the Saudi energy minister
that oil producers shouldn't take high energy prices for granted
playing a role, according to DNB Markets's Helge Andre
The analyst added that similarly conservative comments from
Nigeria and Azerbaijan are also having an effect, with the oil
market "discounting diminishing chances of additional OPEC+
On top of that Goldman Sachs said in a note that it estimates
that "global oil demand has surpassed 99 million barrels a day and
will shortly hit its pre-COVID level of 100 million barrels a day
as Asia rebounds post the Delta wave," with gas-to-oil switching
Gold prices rose despite higher bond yields as investors worry
about inflation. A gauge of inflation expectations in the U.S. rose
to a nine-year high last week, noted Daniel Briesemann, an analyst
at Commerzbank, while a similar measure in the Eurozone is also
"The markets are pricing higher inflation in more and more...and
many market participants clearly believe that the current high
level of inflation is no longer merely temporary," he said.
TODAY'S TOP HEADLINES
Facebook Expected to Post Slower Sales Growth With Apple Privacy
Facebook Inc. is poised to post another quarter of record sales,
though analysts expect changes in Apple Inc.'s app-privacy rules to
have weighed on the social-media company's digital-advertising
Facebook's earnings, due Monday after market close, could show
slower growth in ad sales, the company's primary source of revenue.
It is the first full quarter since Apple, in April, required apps
to ask users whether they want to be tracked. That change has made
it harder for advertisers to target their ads at the right audience
and get information regarding how well their ads performed.
HSBC Says It Will Buy Back $2 Billion in Stock as Profit
Global banking giant HSBC Holdings PLC said it would buy back up
to $2 billion in stock after its third-quarter net profit jumped,
as the lender released more provisions it had previously made for
The London-based bank, which makes most of its profit in Hong
Kong and mainland China, earned $3.54 billion in the three months
to the end of September, up from $1.36 billion in the same period
PayPal Says Not Pursuing Acquisition of Pinterest
U.S. payments giant PayPal Holdings Inc. said it isn't currently
pursuing a deal for social-media platform Pinterest Inc., days
after media reports that the companies were in early talks for a
In a one-sentence statement dated Sunday on its website, PayPal
said that "in response to market rumors regarding a potential
acquisition of Pinterest by PayPal," the company "is not pursuing
an acquisition of Pinterest at this time."
Tesla Supplier Shows Off More Powerful Battery
TOKYO-Tesla Inc. supplier Panasonic Corp. showed off for the
first time a larger lithium-ion battery that it plans to supply to
the U.S. electric-vehicle maker.
The 4680 cylindrical battery cell gets its name from being 46
millimeters in diameter and 80 millimeters high. It is larger than
previous battery cells Panasonic has supplied to Tesla.
Francisco Partners Targets $2 Billion for New Fund Focused on
Smaller Tech Deals
Private-equity firm Francisco Partners is targeting $2 billion
for its third Agility fund, which will focus on smaller deals than
the technology-focused firm's main vehicles, according to people
familiar with the matter.
If Francisco Partners reaches its goal for the new fund it would
be over 33% larger than its predecessor Agility fund, which closed
with $1.5 billion last year. The San Francisco-based firm's maiden
Agility fund collected $600 million in 2016.
Facebook's Internal Chat Boards Show Politics Often at Center of
In June 2020, when America was rocked by protests over the death
of George Floyd at the hands of a Minneapolis police officer, a
Facebook employee posted a message on the company's racial-justice
chat board: "Get Breitbart out of News Tab."
News Tab is a feature that aggregates and promotes articles from
various publishers, chosen by Facebook. The employee's message
included screenshots of headlines on Breitbart's website, such as
"Minneapolis Mayhem: Riots in Masks," "Massive Looting, Buildings
in Flames, Bonfires!" and "BLM Protesters Pummel Police Cars on
Fed Prepares to Taper Stimulus Amid More Doubts on Inflation
Federal Reserve officials are set to wind down their $120
billion-a-month bond-purchase program in November, but questions
over how soon inflation pressures will fade are creating more
uneasiness inside the central bank.
Fed Chairman Jerome Powell and senior officials have played down
worries this year that a surge in prices during the uneven pandemic
recovery would lead to permanently higher inflation. The most
notable price increases have been tied to items most affected by
the shutdown and reopening of the economy, but there are signs that
inflation is coming from a broader set of products and
Energy-Stock Surge Leaves Climate-Focused Investors Behind
A surge in energy stocks is challenging climate-conscious money
managers who beat the market for years when the sector struggled
but are now missing out on Wall Street's hottest trade.
The S&P 500 energy sector has rebounded 54% this year,
outpacing the broad index's 21% climb and leading the second-best
performing group by about 16 percentage points. That would mark the
third-largest such gap between the top two sectors since 2000,
according to Dow Jones Market Data.
Economy Week Ahead: Central Banks, GDP, Consumer Spending
Gross domestic product data from the U.S. and eurozone this week
will show how sharply economic growth slowed in the third
German Business Sentiment Declined Again in October
German business sentiment worsened again in October, as supply
bottlenecks clouded the short-term outlook.
The Ifo business-climate index decreased to 97.7 points in
October from 98.9 points in September, data from the Ifo Institute
showed Monday. This is the fourth consecutive decrease of the
indicator after it peaked at 101.8 in June.
Powell Says Supply-Side Constraints Have Worsened, Creating More
Federal Reserve Chairman Jerome Powell indicated he is now
somewhat more concerned about higher inflation and said that the
central bank would watch carefully for signs that households and
businesses were expecting sustained price pressures to
"Supply-side constraints have gotten worse," Mr. Powell said
Friday at a virtual conference. "The risks are clearly now to
longer and more-persistent bottlenecks, and thus to higher
Xi's 'Common Prosperity' in Theory and Practice
Investors had, over the past 30 years, grown so accustomed to
ignoring rhetoric about communism from nominally-communist China
that a leader firmly putting equality at the heart of his economic
agenda has caused more than a little heartburn. The Oct. 15 release
of a fuller transcript of President Xi Jinping's mid-August remarks
on "common prosperity" therefore piqued considerable interest.
The publication in the party's theoretical journal, "Seeking
Truth," appears partly aimed at reassuring investors and
entrepreneurs spooked by novel language about "rationally
adjusting" excessive incomes in the original mid-August readout of
Mr. Xi's speech, which came at the height of Beijing's campaign to
rein in its internet giants.
Tax on Billionaires' Unrealized Gains Will Likely Be in Budget
Package, Democrats Say
WASHINGTON-A new annual tax on billionaires' unrealized capital
gains is likely to be included to help pay for the vast social
policy and climate package lawmakers hope to finalize this week,
senior Democrats said Sunday.
"We probably will have a wealth tax," House Speaker Nancy Pelosi
(D., Calif.) said Sunday on CNN, noting that Senate Democrats were
still working on their proposal, which isn't technically a wealth
tax but bears a strong resemblance to that idea.
Bitcoin ETF's Success Could Come at Fundholders' Expense
There are signs that the bitcoin futures market isn't big enough
for a planned wave of crypto exchange-traded funds.
Since launching Tuesday, the ProShares Bitcoin Strategy ETF has
amassed $1.2 billion in investor assets, the quickest
billion-dollar fundraising on record.
U.S. Covid-19 Battle Turns a Corner as Borders Open to Foreign
When U.S. borders open to foreign travelers on Nov. 8, the
country will have lifted one of the longest-standing restrictions
imposed 19 months ago at the start of the pandemic, signaling a new
phase of guarded optimism in the nation's battle with Covid-19.
With the Delta variant surge easing and vaccinations opening to
more age groups, many places are dropping mask mandates or other
restrictions on vaccinated people. The pullback represents a bet
that the most recent surge could be the last.
SolarWinds Hackers Continue to Hit Technology Companies, Says
The Russia-linked hackers behind last year's compromise of a
wide swath of the U.S. government and scores of private companies,
including SolarWinds Corp., have stepped up their attacks in recent
months, breaking into technology companies in an effort to steal
sensitive information, cybersecurity experts said.
Turkey's Erdogan Threatens to Expel 10 Western Ambassadors,
Including U.S. Envoy
Turkey's President Recep Tayyip Erdogan threatened to expel the
U.S. ambassador and the top envoys of nine other Western countries
who called for the release of a jailed philanthropist, in a move
that could further strain ties between the two NATO allies.
"These 10 ambassadors must be declared personae non gratae at
once," Mr. Erdogan said at a rally on Saturday in the western
Turkish city of Eskisehir. "I gave the necessary order to our
foreign minister and said what must be done."
Sudanese Prime Minister Detained in Apparent Military Coup
Sudan's prime minister was detained following an apparent
military coup of the transitional government that has been ruling
the country since the ouster of longtime dictator Omar al-Bashir,
the country's information ministry and several government officials
Tensions between civilian officials and the generals who have
been ruling Sudan under an uneasy power-sharing deal have been
escalating for several weeks amid a spiraling economic crisis in
the strategic nation on the Horn of Africa.
Biden Pares Back Policy Goals in Search of a Deal
WASHINGTON-With a series of deadlines approaching, President
Biden's increased involvement in talks over his sweeping
social-policy agenda shows the line he is walking between being a
pragmatic deal maker, with hopes of delivering tangible political
wins, and his desire to enact transformative, long-term progressive
House Speaker Nancy Pelosi (D., Calif.) said Sunday she was
optimistic lawmakers would be able to agree this week to a
framework on the legislation and vote on a separate, roughly $1
trillion infrastructure package before current highway funding
expires next Sunday. The administration hopes to have a deal in
hand before the president heads overseas this week on a trip that
includes climate talks in Scotland.
Australia Backs $1.6 Billion Buy of Pacific Mobile Networks
SYDNEY-Australia is backing the purchase of mobile networks in
six Pacific countries, a move that foreign-policy experts say is
designed to block a military rival from buying the strategically
The government said its export-finance arm agreed to provide
$1.33 billion in funding to support the $1.6 billion purchase by
Telstra Corp., Australia's biggest communications provider, of the
networks in Papua New Guinea, Fiji, Nauru, Samoa, Tonga and
Vanuatu. The networks, being bought from Jamaica-based Digicel
Group, are adjacent to subsea cables that carry communications
between Australia and its neighbors.
Write to firstname.lastname@example.org
TODAY IN CANADA
Celestica Inc. CLS.T) 3Q
PrairieSky Royalty Ltd (PSK.T) 3Q
Restaurant Brands Intl Inc (QSR.T) 3Q
Economic Indicators (ET):
N/A Nunavut municipal elections in Canada
Stocks to Watch:
No items published
No items published
No items published
Expected Major Events for Monday
05:00/JPN: Aug Indexes of Business Conditions - Revision
05:30/JPN: Sep Tokyo area department store sales
05:30/JPN: Sep Nationwide department store sales
08:00/GER: Oct Ifo Business Climate Index
12:30/US: Sep CFNAI Chicago Fed National Activity Index
14:30/US: Oct Texas Manufacturing Outlook Survey
23:01/UK: Sep Zoopla House Price Index
23:50/JPN: Sep Services Producer Price Index
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
Adamis Pharmaceuticals Corp (ADMP) is expected to report $-0.04
Alliance Resource Partners LP (ARLP) is expected to report $0.73
Atlantic Union Bankshares Corp (AUB) is expected to report for
BancorpSouth Bank (BXS) is expected to report $0.65 for 3Q.
Bank Of Marin Bancorp (BMRC) is expected to report $0.08 for
Bank of Hawaii Corp (BOH) is expected to report $1.33 for
CF Bankshares Inc (CFBK) is expected to report for 3Q.
CSB Bancorp Inc (CSBB) is expected to report for 3Q.
Cadence Design Systems (CDNS) is expected to report $0.51 for
Calix (CALX) is expected to report $0.20 for 3Q.
Chemung Financial (CHMG) is expected to report $1.23 for 3Q.
Citizens Holding Co (CIZN) is expected to report for 3Q.
Community Bank System (CBU) is expected to report $0.81 for
Community West Bancshares (CWBC) is expected to report for
Consumer Portfolio Services Inc (CPSS) is expected to report
$0.15 for 3Q.
Crown Holdings (CCK) is expected to report $1.87 for 3Q.
Dorman Products (DORM) is expected to report $1.31 for 3Q.
Enterprise Financial Services Corp (EFSC) is expected to report
$1.01 for 3Q.
F&M Bank (FMBM) is expected to report for 3Q.
FS Bancorp (FSBW) is expected to report $0.89 for 3Q.
HBT Financial Inc (HBT) is expected to report for 3Q.
HMN Financial Inc (HMNF) is expected to report for 3Q.
HNI Corporation (HNI) is expected to report $0.44 for 3Q.
Hope Bancorp Inc (HOPE) is expected to report $0.42 for 3Q.
Kimberly-Clark Corp (KMB) is expected to report $1.54 for
Lake Shore Bancorp (LSBK) is expected to report for 3Q.
Lakeland Financial (LKFN) is expected to report $0.93 for
Ledyard Financial Group (LFGP) is expected to report for 3Q.
Lennox International Inc (LII) is expected to report $3.67 for
Northwest Bancshares Inc (NWBI) is expected to report $0.22 for
Otis Worldwide Corp (OTIS) is expected to report for 3Q.
Penns Woods Bancorp (PWOD) is expected to report for 3Q.
Peoples Bancorp of NC (PEBK) is expected to report for 3Q.
Restaurant Brands International (QSR,QSR.T) is expected to
report $0.90 for 3Q.
SITE Centers Corp (SITC) is expected to report $0.04 for 3Q.
Sierra Bancorp (BSRR) is expected to report $0.63 for 3Q.
Travelzoo (TZOO) is expected to report for 3Q.
TriCo Bancshares (TCBK) is expected to report $0.93 for 3Q.
Washington Trust Bancorp Inc (WASH) is expected to report $0.96
Wayne Savings Bancshares Inc (WAYN) is expected to report for
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Five9 Raised to Overweight From Sector Weight by Keybanc
Independent Bank MA Cut to Neutral From Overweight by Piper
Whirlpool Cut to Underperform From Sector Perform by RBC
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
October 25, 2021 06:18 ET (10:18 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.