Here are five things you must know for Thursday, July 29:
1. -- Stock Futures Rise as Fed Says Not Time to Begin Tapering Stimulus
Stock futures traded mostly higher Thursday after solid earnings and the Federal Reserve said the economy was making progress but it still had a ways to go before the central bank begins tapering stimulus.
Contracts linked to the Dow Jones Industrial Average rose 138 points, S&P 500 futures were up 6 points and Nasdaq futures fell 27 points.
The yield on the benchmark 10-year Treasury rose Thursday to 1.266%.
Federal Reserve officials said “the economy has made progress” toward its goals for employment and inflation, indicating changes to the Fed's stimulus could be coming.
But Fed Chairman Jerome Powell said the central bank wasn't ready to begin pulling back on its monthly bond purchases of $120 billion a month.
“We’re not there. And we see ourselves as having some
ground to cover to get there,” Powell said Wednesday after the Federal Open Market Committee kept interest rates unchanged at a range near zero.
The Federal Reserve also noted that the path to a sustained economic recovery "depends on the course" of the coronavirus and the pace of vaccinations.
"The Fed acknowledged that the economy has made progress towards meeting employment and inflation goals so we’re likely getting closer to an official tapering announcement, but we still think September is when that is likely to take place," said Lawrence Gillum, fixed income strategist for LPL Financial.
"That the committee didn’t really acknowledge the pick-up in COVID-19 cases due to the delta variant was somewhat surprising and maybe a bit more hawkish than expected, but overall the decisions were in-line with our expectations,” Gillum added.
Stocks in Asia posted solid gains Thursday after China made efforts to soothe the market's nerves over stricter anti-monopoly and data security enforcement of the tech industry.
2. -- Thursday's Calendar: Amazon Earnings, GDP and Jobless Claims
Earnings reports are expected Thursday from Amazon.com (AMZN) - Get Amazon.com, Inc. Report, Mastercard (MA) - Get Mastercard Inc. (MA) Report, Comcast (CMCSA) - Get Comcast Corporation Class A Report, Merck (MRK) - Get Merck & Co., Inc. (MRK) Report, T-Mobile (TMUS) - Get T-Mobile US, Inc. Report, Pinterest (PINS) - Get Pinterest, Inc. Class A Report, Altria (MO) - Get Altria Group Inc Report and Twilio (TWLO) - Get Twilio, Inc. Class A Report.
The economic calendar in the U.S. Thursday includes the first estimate of second-quarter GDP at 8:30 a.m. ET, weekly Jobless Claims at 8:30 a.m. and Pending Home Sales at 10 a.m.
3. -- Robinhood's IPO Is Priced at $38 a Share
Robinhood, the popular trading platform, had been seeking to sell shares between $38 and $42 each. The offering of about 55 million shares should raise more than $2 billion for the company.
The pricing gave the company a valuation of about $32 billion, well more than its previous $12 billion valuation.
The price reflects both hesitation on the part of some investors, as well as a
conscious decision by the company and its underwriters to be conservative in
order to help set up a successful first day of trading, The Wall Street Journal reported, citing people familiar with the matter.
In keeping with its stated mission to democratize finance, Robinhood reserved up to 35% of its shares for retail investors for purchase on its platform.
Robinhood will begin trading Thursday on the Nasdaq stock exchange under the symbol "HOOD."
4. -- Facebook Falls After Warning of Slowing Growth
Facebook (FB) - Get Facebook, Inc. Class A Report posted stronger-than-expected second-quarter earnings but the stock slumped in premarket trading after the social media giant noted that ad revenue growth would slow "significantly" over the second half of the year.
Facebook reported second-quarter earnings of $3.61 a share, compared with $1.80 a share a year earlier and above analysts' estimates of $3.02. Revenue rose 56% to $29.1 billion. Advertising revenue was $28.58 billion.
The company repeated its view that year-over-year total revenue growth would decelerate when compared to the second quarter.
"We expect year-over-two-year total revenue growth to
decelerate modestly in the second half of 2021 compared to the
second-quarter growth rate,” Facebook said. Factored into the outlook were "increased" ad targeting headwinds related to regulatory and platform changes.
The stock fell 4.11% to $357.93 in premarket trading Thursday.
"Overall, Facebook's better-than-expected result is being met with a "sell the news reaction" ... as some investors are taking caution in management's revenue growth outlook," said Jim Cramer and the Action Alerts PLUS team, which owns Facebook in its portfolio. "We are willing to give FB the benefit of the doubt considering how conservative management has become with their forecasts."
5. -- Ford Posts Surprise Profit and Boosts Guidance
Ford (F) - Get Ford Motor Company Report shares were rising nearly 4% in premarket trading after the automaker posted a surprise profit in the second quarter and boosted guidance despite a global semiconductor shortage that has dogged the auto industry.
The stock rose 3.75% to $14.38 early Thursday.
Ford raised its guidance for full-year adjusted earnings before taxes by about $3.5 billion, to between $9 billion and $10 billion.
The company also said it expects volumes to increase by about 30% sequentially from the first half of the year to the second.