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Fed's Powell, Apple, Peloton and VMware - 5 Things You Must Know Friday

Stock futures rise ahead of a speech from Fed Chairman Jerome Powell; Peloton cuts the price of its most popular bike and issues a weak forecast; Apple makes App Store changes in settlement with developers.

Here are five things you must know for Friday, Aug. 27:

1. -- Stock Futures Rise Ahead of Jerome Powell Speech

Stock futures rose Friday ahead of a speech from Federal Reserve Chairman Jerome Powell that could provide Wall Street with clues about the central bank's plans for pulling back on stimulus.

Contracts linked to the Dow Jones Industrial Average rose 85 points, S&P 500 futures gained 13 points and Nasdaq futures were up 50 points.

The yield on the benchmark 10-year Treasury dipped Friday to 1.343% as investors awaited Powell’s (virtual) speech at the Jackson Hole symposium. Many investors believe the Fed chief won't be specific about a timeline on tapering since the highly contagious delta virus strain has become a major risk to an economic recovery in the U.S. and the world.

"The minutes from the Fed's July policy meeting made it clear no one at the Fed seems ready to move that fast," said Anthony Denier, CEO of trading platform Webull. "Even though that was last month, there doesn't seem to be any event or news big enough to change that opinion."

However, a number of Fed officials said Thursday that the economy has reached the point where the central bank can begin pulling back on economic stimulus. Kansas City Fed President Esther George told CNBC it was "appropriate given the progress we’ve seen." 

Dallas Fed President Robert Kaplan said he would be pushing for the Fed to announce a pullback in stimulus in September with tapering to begin in either October or November.

Those hawkish remarks, plus two apparent suicide bombings in Afghanistan that killed at least 13 U.S. service members, dented sentiment and led markets lower on Thursday. More than 90 Afghans were killed by the blasts.

2. -- Friday's Calendar: Powell at Jackson Hole, Personal Incomes and Spending

The economic calendar in the U.S. Friday includes International Trade in Goods (Advance) for July at 8:30 a.m. ET, Personal Income and Outlays for July at 8:30 a.m. and Consumer Sentiment for August at 10 a.m.

Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Economic Symposium is scheduled for 10 a.m.

Earnings reports are expected Friday from Microvast Holdings  (MVST) , Big Lots  (BIG) , Hibbett  (HIBB)  and Ubiquiti  (UI)

3. -- Peloton Cuts Bike Price and Issues a Weak Revenue Forecast

Peloton Interactive  (PTON)  shares were falling more than 8% early Friday after the digital fitness company reported a wider-than-expected fourth-quarter loss, issued a revenue outlook below estimates and slashed the price of its most-popular bike.

Peloton said Thursday it was cutting the price of its Peloton Bike, the second price cut this year, to $1,495 from $1,895, or $39 per month with a 39-month financing plan.

The company said it cut the price to broaden its base, but it also could be seen as a sign competition has been increasing and demand for Peloton's products has been waning.

The company posted a fiscal fourth-quarter loss of $1.05 a share vs. analysts' expectations of a loss of 44 cents. Revenue of $936.9 million beat forecasts of $929.6 million.

Peloton said it expects revenue in its fiscal first quarter of $800 million, below estimates of $1 billion. 

The stock dropped 8.74% to $104.12 in premarket trading Friday.

4. -- Apple Makes App Store Changes in Settlement

Apple  (AAPL)  reached a settlement with app makers that would allow developers to tell the company's iPhone and iPad customers about ways to pay outside the official App Store.

Apple agreed to let developers of iPhone apps email their users about cheaper ways to pay for digital subscriptions and media by circumventing Apple's commission system, according to the Associated Press. The concession covers emailed notifications but doesn't allow in-app notifications. 

Makers of iPhone apps have long been forbidden to email users with information on how to pay for services outside the app, which would circumvent Apple commissions of 15% to 30%.

The company also will establish a $100 million fund for small developers. The Small Developer Assistance Fund will allow developers whose sales were less than $1 million a year from June 2015 to April 2021 collect between $250 and $30,000, The Wall Street Journal noted.

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5. -- VMware Falls as Cloud Revenue Misses Estimates

VMware  (VMW)  tumbled after fiscal second-quarter revenue at the company's cloud business missed analysts' estimates.

VMware reported an adjusted profit in the second quarter of $1.75 a share, higher than forecasts of $1.64 a share. Revenue of $3.14 billion also beat Wall Street estimates. But subscription and software-as-a-service revenue, while rising 23% to $776 million, missed forecasts of $790 million.

The stock fell 5.69% to $149.76 in premarket trading Friday.

Dell Technologies  (DELL) , which is the majority holder of VMware, reported adjusted second-quarter earnings and revenue that beat Wall Street's expectations.