- NASDAQ: FB is rising amid hopes for a fiscal stimulus package that may come before or after the elections.
- Ad spending on Facebook is set to increase in the long "election month."
- Rising coronavirus cases could drive more shopping online, benefiting the social network.
Facebook Inc. (NASDAQ: FB) is on the rise – and that is unlikely a surprise when all tech shares are on the rise. Mark Zuckerberg's firm is edging higher as investors anticipate Congress to strike a deal on a new fiscal stimulus package. President Donald Trump said that he would offer more than Democrats.
It remains unclear if Senate Republicans would back their standard-bearer as they prefer only a minor support package – and as Trump is trailing rival Joe Biden in the polls. However, the social media behemoth has other reasons to advance.
FB Stock Forecast
1) Economic relief is coming after the elections: Democrats and Republicans are set to posture ahead of the vote and fail to strike a deal. However, they may reach one after the vote, boosting the American economy and indirectly affecting Facebook.
If Dems win the Senate – and they have a good chance of doing so – a more generous package is likely. The party has criticized FB for serving as a platform for fake news supporting Trump. However, Kamala Harris, the Vice-President candidate, has been friendly to tech firms in her home state of California. At least initially, a Biden administration is likely to only "slap tech on the wrist" rather than try to break it up.
2) Election spending unlikely to end: Facebook depends on ad spending, including political propaganda. With record mail-in and early votes, the elections are unlikely to end on the night of November 3, but more likely to extend for several weeks. Apart from a potential battle in courts, both parties will fight for public opinion – and that could extend spending throughout November – perhaps bridging the gap between election day and Black Friday shopping.
3) More online shopping: The world is watching the US elections and rising COVID-19 cases in Europe – but infections are also surging in the US and elsewhere. With more people staying at home once again, online consumption may reach new highs – and that means more spending as well.
Moreover, Zuckerberg and co. are expanding their e-commerce abilities, right in time for the peak of the second wave of the virus.
Overall, there are reasons for Facebook to rise.
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