Tesla, Microsoft, Apple, Amazon and Unemployment - 5 Things You Must Know Thursday

Stock futures turn mixed ahead of earnings from Amazon.com and Apple; Wall Street braces for the latest data on the number of Americans who have filed for unemployment benefits; Microsoft's cloud operations drive the company's earnings beat; Tesla posts a surprise first-quarter profit.

Here are five things you must know for Thursday, April 30:

1. -- Stock Futures Mixed Ahead of Earnings From Amazon and Apple

Stock futures were mixed Thursday, a day after equities closed with sharp gains on optimism over a possible treatment for the coronavirus, as investors awaited earnings from tech heavyweights Amazon.com  (AMZN) - Get Report and Apple  (AAPL) - Get Report and braced for the latest data on the number of Americans who have filed for unemployment benefits. 

Contracts linked to the Dow Jones Industrial Average fell 52 points, futures for the S&P 500 slipped 11 points and Nasdaq futures were up 7 points.

Stocks finished sharply higher Wednesday after investors embraced news on the effectiveness of a Gilead Sciences'  (GILD) - Get Report drug to combat the coronavirus, looked past weak U.S. economic growth and were heartened by a Federal Reserve that said it would "use its tools" to support the economy.

The Fed on Wednesday left rates unchanged and pledged to maintain rates near zero, saying the coronavirus pandemic "poses considerable risk to the economic outlook over the medium term."

“Chairman (Jerome) Powell gave a comforting message that reiterated the Federal Reserve’s commitment to use essentially limitless lending and asset purchases to support the economy. These actions will help credit markets and keep credit flowing to companies that urgently need capital," said Dev Kantesaria, founder and managing partner of Valley Forge Capital Management. "I expect the Fed to maintain interest rates near zero for a prolonged period as it seeks to aggressively grow employment and combat deflationary pressures.” 

The Dow finished up 532 points, or 2.21%, to 24,634, the S&P 500 gained 2.66% and the Nasdaq jumped 3.57%.

The economic calendar Thursday includes weekly Jobless Claims at 8:30 a.m. ET. Initial claims are estimated to have slowed to 3.25 million in the week ended April 25 from 4.427 million in the previous week. A total of 26.7 million Americans have filed for unemployment benefits since mid-March.

The calendar also includes Personal Income and Outlays for March at 8:30 a.m.

2. -- Microsoft's Cloud Operations Drive Earnings Beat

Microsoft's  (MSFT) - Get Report fiscal third-quarter earnings topped analysts' forecasts as the tech giant's cloud-computing operations benefited from the lockdown that has kept many workers at home.

Earnings in the quarter were $1.40 a share vs. $1.14 a year earlier and revenue jumped 15% to $35 billion.

Analysts had been calling for earnings of $1.28 a share on sales of $33.76 billion.

Microsoft’s cloud business, Azure, saw sales soar 59% in the quarter.

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security,” said Microsoft CEO Satya Nadella.

“We are working alongside customers every day to help them adapt and stay open for business in a world of remote everything. Our durable business model, diversified portfolio, and differentiated technology stack position us well for what’s ahead,” the CEO added.

"Bottom line: We believe this quarter to be a perfect example of why Microsoft is able to justify its over $1 trillion market cap," said Jim Cramer and the Action Alerts PLUS team, which holds Microsoft in its portfolio. "Not only does it have the growth profile investors want, but perhaps more importantly, it has a business model with the resiliency to operate in any environment."

The stock rose 2% in premarket trading to $181.03.

3. -- Tesla Posts Surprise First-Quarter Profit

Tesla  (TSLA) - Get Report posted a surprise first-quarter profit and the stock rose 8.36% to $867.40 in premarket trading Thursday.

On an adjusted basis, the electric carmaker earned $1.24 a share in the quarter while analysts had expected Tesla to report a loss 28 cents a share. GAAP earnings were 9 cents a share, a reversal from a year-earlier loss of $2.90 a share.

The first quarter was "the first time in our history that we achieved a positive GAAP net income in the seasonally weak first quarter. Despite global operational challenges, we were able to achieve our best first quarter for both production and deliveries,” Tesla said in a letter to investors.

Tesla said that income and free cash flow guidance likely will be inaccurate owing to uncertainty from the coronavirus pandemic, but that it will "revisit" its 2020 guidance in its second-quarter update.

"It is difficult to predict how quickly vehicle manufacturing and its global supply chain will return to prior levels. Due to the wide range of potential outcomes, near-term guidance of net income and free cash flow would likely be inaccurate," the company wrote. 

Meanwhile, CEO Elon Musk called the widespread shelter-in-place orders that have suspended operations at Tesla's main factory in California, "fascist."

4. -- Facebook Sees Signs of 'Stability' in Advertising Revenue

Facebook  (FB) - Get Report posted better-than-expected first-quarter revenue and the stock was rising after the company said it was seeing "signs of stability" in advertising revenue.

Shares rose 9.45% to $212.55 after the social media giant reported earnings of $4.9 billion, or $1.71 a share, vs. estimates of $1.74, and revenue of $17.74 billion that topped estimates of $17.33 billion.

Monthly average users, Facebook said, jumped 10% to 2.6 billion, higher than analysts' expectations of 2.55 billion.

Facebook, however, said like many other companies it was "facing a period of unprecedented uncertainty in our business outlook” because of the coronavirus pandemic.

It declined to provide financial guidance for the second quarter and full year.

However, Facebook said, "after the initial steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April."

"This is the key comment," said Jim Cramer and the Action Alerts PLUS team, which holds Facebook in its portfolio. "It is similar to what we heard from Alphabet  (GOOGL) - Get Report Tuesday night and an encouraging sign that the worst Facebook will see may already be behind it."

5. -- McDonald's, Twitter, Gilead, Altria Report Earnings

While Amazon and Apple most certainly are the highlights of Thursday's earnings calendar, reports also will be issued by McDonald's  (MCD) - Get Report, Gilead Sciences, Altria  (MO) - Get Report, Twitter  (TWTR) - Get Report, Kraft Heinz  (KHC) - Get Report, Visa  (V) - Get Report, Dunkin' Brands  (DNKN) - Get Report, Amgen  (AMGN) - Get Report, American Airlines  (AAL) - Get Report, United Airlines  (UAL) - Get Report, MGM Resorts  (MGM) - Get Report, U.S. Steel  (X) - Get Report, Comcast  (CMCSA) - Get Report, Dow Inc.  (DOW) - Get Report and Kellogg  (K) - Get Report.

Amazon and Apple 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.

StreetLightning Videos With Jim Cramer:

  • Nancy Pelosi and Jim Cramer
  • GE Wasn't a Good Quarter