Here are five things you must know for Thursday, April 29:
1. -- Stock Futures Rise on Fed, Blowout Tech Earnings
Stock futures were rising Thursday after the Federal Reserve noted the U.S. economy was strengthening but reiterated it would remain supportive and earnings reports from tech giants Apple (AAPL) - Get Report and Facebook (FB) - Get Report smashed expectations.
Optimism also got a boost from President Joe Biden's unveiling of a proposed $1.8 trillion spending plan on education, childcare and infrastructure over the next 10 years. The president said taxes for the richest 1% of Americans would be raised to help pay for his plan.
Biden also touted his administration's rollout of coronavirus vaccines, saying the country had turned a corner on the pandemic.
Contracts linked to the Dow Jones Industrial Average rose 169 points, S&P 500 futures gained 30 points and Nasdaq futures jumped 135 points.
The benchmark 10-year Treasury yield rose to 1.652% early Thursday.
Stocks closed lower Wednesday after the Federal Reserve noted the U.S. economy was strengthening but provided few surprises by keeping interest rates near zero and maintaining its $120 billion in monthly asset purchases.
“Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the Fed said in a statement following the conclusion of its two-day meeting. “The sectors most adversely affected by the pandemic remain weak but have shown improvement."
Federal Reserve Chairman Jerome Powell dismissed worries about price surges, saying that while inflation has risen they largely reflect transitory factors.
2. -- Apple's Earnings Smash Estimates as Sales Jump 54%
Apple (AAPL) - Get Report jumped 3% in premarket trading to $137.58 after the tech giant posted fiscal second-quarter earnings that trounced Wall Street estimates and boosted its stock buyback program by $90 billion as post-pandemic demand in China powered a massive surge in iPhone sales.
Apple said iPhone revenue soared 65% from last year to $47.94 billion, well ahead of analysts' forecasts of $41.7 billion, thanks to what CEO Tim Cook called "strong demand for the iPhone 12 family." Greater China revenue rose 88% from last year's pandemic trough to $17.73 billion.
Earnings at Apple rose 118% to $1.40 a share and easily topped estimates of 99 cents. Total revenue rose 54% from last year to $89.58 billion, beating analysts' estimates of $77.35 billion.
Apple didn't provide a forecast for the fiscal third quarter in its earnings release. But on a conference call, Apple said supply constraints will crimp revenue by as much as $4 billion in the June quarter, Bloomberg reported.
Goldman Sachs upgraded Apple shares to neutral from sell, and lifted its price target to $130 from $83.
"Bottom line, this was about as clean a quarter as anyone could have asked for," said Jim Cramer and the Action Alerts PLUS team, which holds Apple in its portfolio. "With shares trading within spitting distance of all-time highs coming into the release, expectations were high and Apple did not disappoint."
3. -- Facebook's Ad Revenue Surges and Users Jump
Facebook (FB) - Get Report was rising more than 7% early Thursday after surging ad revenue helped the social media giant beat Wall Street's first-quarter earnings expectations.
First-quarter sales at Facebook jumped 48% to $26.2 billion and topped estimates of $23.7 billion. Advertising revenue totaled $25.44 billion, with growth driven by a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads delivered.
The company reported monthly active users rose 10% to 2.85 billion, higher than projections of 2.83 billion.
Facebook noted that Apple's addition of privacy restrictions to iPhones was a potential risk to its advertising business.
"Although the Apple iOS update could challenge the company's ability to create personalized ads, Facebook is still one of, if not the best-positioned platform to navigate the changes," said Jim Cramer and the Action Alerts PLUS team, which holds Facebook in its portfolio.
4. -- Ford Says Chip Shortage to Hit Second-Quarter Production
Ford (F) - Get Report reported first-quarter earnings that beat analysts' forecasts and raised its guidance, but the automaker also said second-quarter production would be hit dramatically by the global semiconductor chip shortage.
The stock fell 2.49% to $12.12 in premarket trading Thursday.
Ford and other automakers have been grappling with the chip shortage, which last month forced the No. 2 automaker to idle production of its popular and highly profitable F-150 pickup truck at its plant in Dearborn, Mich.
Ford's Chief Financial Officer John Lawler said semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better, though the issue "... will bottom out during the second quarter, with improvement through the remainder of the year."
Ford said the chip shortage will reduced adjusted pretax profit for the year by $2.5 billion. The company said it expects to lose about 50% of its planned second-quarter production, up from 17% in the first quarter.
The automaker said it now assumes to lose 10% of planned second-half 2021 production.
"Ford's work is far from over, but we must not let the chip shortage allow us to lose sight of how this company and its new management team have completely turned around the business," said Jim Cramer and the Action Alerts PLUS team, which holds Ford in its portfolio.
5.-- Thursday's Calendar: Amazon Earnings, GDP and Jobless Claims Data
Caterpillar (CAT) - Get Report reported first-quarter adjusted earnings of $2.87 a share vs. Wall Street expectations of $1.94 a share.
Earnings reports are also expected Thursday from Amazon.com (AMZN) - Get Report, Bristol Myers (BMY) - Get Report, McDonald's (MCD) - Get Report, Twitter (TWTR) - Get Report, Comcast (CMCSA) - Get Report, Merck (MRK) - Get Report, Kraft Heinz (KHC) - Get Report, Mastercard (MA) - Get Report, NIO (NIO) - Get Report, Altria (MO) - Get Report, First Solar (FSLR) - Get Report, Skyworks Solutions (SWKS) - Get Report, Domino's Pizza (DPZ) - Get Report, Royal Caribbean (RCL) - Get Report and U.S. Steel (X) - Get Report.
Amazon and Bristol Myers are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.
The U.S. economic calendar Thursday includes the advances estimate for first-quarter GDP at 8:30 a.m. ET, weekly Jobless Claims at 8:30 a.m. and the Pending Home Sales Index for March at 10 a.m.
Economists surveyed by FactSet expect U.S. growth to have jumped 6.4% on an annualized basis in the first quarter, up from 4.3% in the previous quarter, as more Americans received vaccinations and the government kept pumping more stimulus into the economy.
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