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Tesla, Apple, GameStop and WallStreetBets - 5 Things You Must Know Thursday

Stock futures turn mixed; Apple and Tesla issue earnings that disappoint investors; WallStreetBets, the internet forum that has been tied to huge surges in GameStop, briefly turns itself off to new users; McDonald's reports earnings.

Here are five things you must know for Thursday, Jan. 28:

1. -- Stock Futures Turn Mixed, Apple and Tesla Slide

Stock futures traded mixed Thursday after shares of Apple  (AAPL) - Get Apple Inc. Report and Tesla  (TSLA) - Get Tesla Inc. Report declined following quarterly earnings that disappointed traders.

Contracts linked to the Dow Jones Industrial Average rose 51 points, S&P 500 futures edged up 2 points and Nasdaq futures were down 51 points.

Stocks tumbled Wednesday, posting their biggest drop since October, as shares of technology giants fell sharply and Federal Reserve Chairman Jerome Powell was cautious about the outlook for a U.S. economic recovery. The Dow fell 633 points, or 2.05%, the S&P 500 declined 2.57% and the Nasdaq slumped 2.61%.

“We think it’s going to be a struggle,” Powell said Wednesday. “The pandemic still provides considerable downside risks to the economy.”

The Fed announced Wednesday, as expected, that it was keeping interest rates near zero and maintaining its bond-buying program at the current pace of $120 billion a month amid signs an economic recovery "has moderated in recent months."

"Going forward, we believe that the Fed needs to stay the course because we don't have the macro environment for the market to sustain itself," said David W. Wagner, portfolio manager and analyst at Aptus Capital Advisors. "The market is still using crutches as it's not fully healed - that's apparent given that there are so many Americans worse off relative to where they were last year. There are 9 million Americans still unemployed - more than what we saw during the financial crisis."

Investor anxiety also was heightened by the mania gripping heavily shorted shares, such as GameStop  (GME) - Get GameStop Corporation Report, which has soared more than 400% this week as retail traders bid up the stock and big Wall Street firms have bailed.

2. -- WallStreetBets Returns After Briefly Going Private

WallStreetBets, the internet forum that has been tied to huge surges in GameStop, AMC Entertainment  (AMC) - Get AMC Entertainment Holdings Inc. Class A Report and other heavily shorted stocks, briefly turned itself off to new users after its online voice and messaging group on Discord was banned.

In a post late Wednesday after new members were again allowed to join, the WallStreetBets moderators said they had seen overwhelming interest following huge short-squeeze surges in GameStop in recent days. Bloomberg noted that WallStreetBets had racked up more than 3 million members.

Discord said it removed WallStreetBets because the site had allowed “hateful and discriminatory content after repeated warnings” and wasn't related to the surge in GameStop.

GameStop, AMC and Nokia  (NOK) - Get Nokia Corporation Sponsored American Depositary Shares Report - stocks favored by WallStreetBets members - fell sharply after the WallStreetBets server was removed. GameStop was up 29.25% in premarket trading, AMC rose 4.4% and Nokia declined more than 15%.

The massive rallies in these stocks has caught the attention of the Biden administration and the Securities and Exchange Commission, which said it “actively monitoring the ongoing market volatility in the options and equities markets.”

3. -- Tesla Tumbles After Earnings Miss

Tesla  (TSLA) - Get Tesla Inc. Report was tumbling in premarket trading Thursday after the electric vehicle company reported a sixth consecutive quarter of profit that, however, was well below Wall Street expectations.

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The stock fell 4.74% to $823.23.

Tesla earned 80 cents a share on an adjusted basis in the fourth quarter, falling short of analysts’ estimates of $1.02. A year earlier, Tesla posted earnings of $2.14 a share.

Operating margins dropped to 5.4% in the fourth quarter, down from 9.2% in the previous three-months period.

Sales rose 46% in the fourth quarter to $10.74 billion and beat forecasts of $10.47 billion, with Tesla citing "substantial growth” in deliveries. 

Tesla said it sees deliveries growing at least 50% in 2021. While Tesla wasn't specific in its guidance, a growth rate of 50% would mean more than 750,000 units. The company delivered almost 500,000 vehicles globally in 2020.

4. -- Apple Posts Quarterly Revenue of $100 Billion for the First Time

Apple  (AAPL) - Get Apple Inc. Report posted stronger-than-expected fiscal first-quarter earnings and quarterly revenue of more than $100 billion for the first time thanks in part to surging China sales and demand for its new iPhone 12.

Apple earned $1.68 a share in the quarter, beating analysts' forecasts of $1.41. Sales of $111.4 billion, a quarterly all-time high, topped expectations of $103.3 billion.

China revenue surged 56% to $21.3 billion, helping iPhone revenue rise 17% to $65.5 billion. Services revenue rose 24.2% to $15.8 billion.

“Our December quarter business performance was fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices,” said Luca Maestri, Apple’s chief financial officer. “These results helped us generate record operating cash flow of $38.8 billion."

Shares of Apple fell 2.32% to $138.77 in premarket trading Thursday, likely because the company issued a cautious outlook. Executives said sales growth from AirPods and other wearables will decelerate in the second quarter, and warned that services sales in the period will face tougher comparisons with a year earlier, Bloomberg reported.

"Overall, this was a very strong release with across-the-board beats, robust margin performance and great cash flow," said Jim Cramer and the Action Alerts PLUS team, which holds Apple in its portfolio.

5. -- Thursday's Calendar: McDonald's Earnings, Jobless Claims

Earnings are expected Thursday from McDonald's  (MCD) - Get McDonald's Corporation Report, Dow Inc.  (DOW) - Get Dow Inc. Report, American Airlines  (AAL) - Get American Airlines Group Inc. Report, Southwest Airlines  (LUV) - Get Southwest Airlines Company Report, Comcast  (CMCSA) - Get Comcast Corporation Class A Common Stock Report, Altria  (MO) - Get Altria Group Inc. Report, Mastercard  (MA) - Get Mastercard Incorporated Report, Visa  (V) - Get Visa Inc. Report, Mondelez International  (MDLZ) - Get Mondelez International Inc. Report, Western Digital  (WDC) - Get Western Digital Corporation Report, Stanley Black & Decker  (SWK) - Get Stanley Black & Decker Inc. Report, Tractor Supply  (TSCO) - Get Tractor Supply Company Report, U.S. Steel  (X) - Get United States Steel Corporation Report and Northrop Grumman  (NOC) - Get Northrop Grumman Corporation Report.

Mastercard is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stock? Learn more now.

The U.S. economic calendar on Thursday includes Gross Domestic Product for the fourth quarter at 8:30 a.m. ET, weekly Jobless Claims at 8:30 a.m., International Trade in Goods for December at 8:30 a.m. and New Home Sales for December at 10 a.m.