Twitter, Trump, China and Costco - 5 Things You Must Know Friday

Stock futures fall ahead of President Trump's press conference on China; Trump's fight with Twitter escalates; Costco's earnings hit by rising pandemic costs.

Here are five things you must know for Friday, May 29:

1. -- Stock Futures Fall Ahead of Trump's Press Conference on China

Stock futures declined Friday as Wall Street awaited President Donald Trump’s planned press conference on China, which could lead to further friction between Washington and Beijing.

Trump said he would make an announcement Friday “with respect to China,” following a move from Chinese lawmakers to approve a national security law that could limit freedoms in Hong Kong.

The president also has sharply criticized China's response to the coronavirus outbreak.

Contracts linked to the Dow Jones Industrial Average fell 87 points, futures for the S&P 500 dropped 7 points and Nasdaq futures were down 25 points.

U.S. stocks declined Thursday, turning lower in the last hour of trading, after Trump said he would hold a press conference about China. No time for Trump's announcement Friday was specified.

“The concerns are that this escalates over the course of the summer,” said Quincy Krosby, chief market strategist at Prudential Financial. “It’s like lighting a match.”

The Dow fell 147 points, or 0.58%, to 25,400 on Thursday, the S&P 500 dropped 0.21% and the Nasdaq slid 0.46%.

2. -- Fed Chairman Jerome Powell to Speak Friday

The economic calendar Friday includes a question-and-answer discussion with Federal Reserve Chairman Jerome Powell at the Griswold Center for Economic Policy Studies at Princeton University.

Powell's appearance begins at 11 a.m. ET.

The calendar Friday also includes International Trade in Goods for April at 8:30 a.m., Personal Income and Outlays for April at 8:30 a.m. and Consumer Sentiment for May at 10 a.m.

Canopy Growth  (CGC) - Get Report is scheduled to report earnings Friday.

3. -- Trump's Fight With Twitter Escalates

President Trump signed an executive order Thursday with the goal of clamping down on the behavior of social media companies such as Twitter  (TWTR) - Get Report and Facebook  (FB) - Get Report.

At a press conference, Trump summarized the goal of the order as to "make it that social media companies that engage in censoring or any political conduct will not be able to keep their liability shield."

Under Section 230 of the Communications Decency Act, internet platforms that host third-party content are protected for posts from users.

Trump's signing of the executive order was triggered by Twitter's decision this week to affix a fact-checking label to a Trump tweet for the first time.

The spat escalated further Friday after Twitter placed a public interest notice on a Trump tweet, saying the tweet violated the platform’s rules about the “glorification of violence.” The tweet from Trump regarded violence in Minnesota following the death of a black man in police custody.

Twitter shares fell 0.79% to $31.35 in premarket trading Friday.

4. -- Costco Earnings Fall as Pandemic Costs Bite Into Profit

Costco Wholesale  (COST) - Get Report reported fiscal third-quarter earnings below a year earlier as costs for wages and sanitation rose due to the coronavirus pandemic.

Costco earned $838 million, or $1.89 a share, in the quarter, compared with year-earlier profit of $906 million, or $2.05 a share.

The company said the quarter included pretax expenses of $283 million, or 47 cents a share, “from incremental wage and sanitation costs related to Covid-19."

Revenue increased 7.3% to $36.45 billion from $33.96 billion a year earlier as consumers scrambled for goods amid the pandemic. 

The stock declined 2.09% to $303.09 in premarket trading.

"We believe the print was as good as we could have hoped for, given the supply chain dynamics and management's own efforts to stem the spread of the virus by implementing mask and physical distancing policies," said Jim Cramer and the Action Alerts PLUS team, which holds Costco in its portfolio. "While sales dynamics have obviously been impacted as result of the pandemic, we believe the underlying fundamentals to remain intact and expect to see a return to a more normal pace of sales in coming quarters."

Meanwhile, Costco's chief financial officer, Richard Galanti, said on a conference call that the company's food sampling stations would return in June but with new sanitary rules.

5. -- Tesla's  Elon Musk Gets $780 Million Payday

Tesla  (TSLA) - Get Report said CEO Elon Musk had earned the first portion of a huge performance-based stock options package that ties his pay to the electric vehicle company's valuation. 

Musk was granted 1,688,670 Tesla stock options with an exercise price of $350.02, according to a regulatory filing, and Musk could exercise the options as of Thursday. Under those terms, the stock would net about $780 million based on Thursday's closing price of $805.81. 

The award was contingent upon Tesla reaching and maintaining a market capitalization of $100 billion.