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THIS WEEK'S UPDATE

| November 01, 2021
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THE WEEK ON WALL STREET

A fresh wave of positive corporate earnings surprises sent markets to new record

highs last week. The Dow Jones Industrial Average increased 0.40%, while the

Standard & Poor’s 500 rose 1.33%. The Nasdaq Composite index picked up 2.71%

for the week. The MSCI EAFE index, which tracks developed overseas stock

markets, was up 0.68%.

EARNINGS DRIVE MARKET

The week kicked off with the Dow Jones Industrials and S&P 500 index setting

record highs as the financial markets carried over the previous week’s price

momentum. Stocks continued to climb on a string of forecast-beating earnings

results. With about half of the S&P 500 constituent companies having reported

earnings, more than 80% of them have beaten Wall Street analysts’ consensus

estimates. Based on these results, earnings for all S&P 500 companies are expected

to come in approximately 39% above the third quarter of last year. (Forecasts are

based on assumptions, and may not materialize.) Stocks overcame disappointing

earnings from two mega-cap tech names on Friday to maintain the week’s solid

gains.

GDP GROWTH SLOWS

While businesses managed to post strong earnings in the third quarter, the first look

at economic growth came in below consensus estimates. The Gross Domestic

Product (GDP) grew at a 2.0% annualized rate in the third quarter, a slowdown from

the two previous quarters, each of which posted annualized growth rates in excess

of 6%. The spread of the Delta variant and backlogs in the supply chain were two

major factors dragging on economic activity.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: ISM (Institute for Supply Management) Manufacturing Index.

Wednesday: ADP (Automated Data Processing) Employment Report. Factory

Orders. ISM (Institute for Supply Management) Services Index. FOMC (Federal

Open Market Committee) Announcement.

Thursday: Jobless Claims.

Friday: Employment Situation.

THE WEEK AHEAD: NOTABLE COMPANIES REPORTING EARNINGS

Monday: Simon Property Group, Inc. (SPG).

Tuesday: Pfizer, Inc. (PFE), Activision Blizzard, Inc. (ATVI), Amgen, Inc. (AMGN),

Marathon Petroleum Corporation (MPC), ConocoPhillips (COP), Prudential

Financial (PRU), Mondelez International, Inc. (MDLZ), TMobile US, Inc. (TMUS),

The Estee Lauder Companies, Inc. (EL).

Wednesday: CVS Health Corporation (CVS), Qualcomm, Inc. (QCOM), Electronic

Arts (EA), Humana, Inc. (HUM), Booking Holdings, Inc. (BKNG), Match Group,

Inc. (MTCH), Emerson Electric (EMR).

Thursday: Square, Inc. (SQ), Albemarle Corporation (ALB), Southern

Companies (SO), Cigna Corporation (CI), Skyworks Solutions, Inc. (SWKS),

Regeneron Pharmaceuticals, Inc. (REGN).

Friday: DraftKings, Inc. (DKNG).

FINAL THOUGHTS

This will be another big week for earnings, with many big names reporting. As

important as the earning announcements themselves, analysts will be just as

focused on corporate forecasts and supply chain updates. We're experiencing

another strong earnings season. According to Refinitiv, 82% of the S&P 500

companies that have reported results have beaten their EPS projections. Moreover,

profits are on pace to increase 39%. Not too shabby!

In addition to corporate earnings, the economic calendar will feature the FOMC

meeting tomorrow and Wednesday. I think we all know what to expect. To a lesser

extent, Friday's jobs report will shed more light into the real state of the economy.

It's unlikely to have any effect on the Fed's decision to taper.

Have a good week!

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