Apple, Amazon, Google, Facebook - 5 Things You Must Know Thursday

Stock futures slump; tech giants Apple, Amazon, Alphabet and Facebook get set to report earnings; the U.S. economy likely contracted by about 35% in the second quarter.
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Here are five things you must know for Thursday, July 30:

1. -- Stock Futures Point Sharply Lower

Stocks slumped Thursday after the Federal Reserve issued a grim outlook for the U.S. economy and pledged its continuous support, and America's largest and most powerful tech companies prepped to report quarterly earnings.

Wall Street also was preparing for a Commerce Department report that likely will show that during the second quarter the U.S. economy contracted the most since the Great Depression as the coronavirus pandemic halted consumer spending and kept people from traveling or eating at restaurants.

Contracts linked to the Dow Jones Industrial Average declined 249 points, S&P 500 futures fell 33 points and Nasdaq futures were down 114 points.

Stocks closed broadly higher Wednesday after the Fed vowed to continue using all its tools to support the U.S. economy through the coronavirus pandemic. The Dow closed up 160 points, or 0.61%, to 26,441, the S&P 500 gained 1.24% and the Nasdaq rose 1.35%.

The Federal Reserve left its benchmark interest rate near zero and said the "path of the economy will depend significantly on the course of the virus.”

The central bank added that economic activity and employment, after steep declines, “have picked up somewhat in recent months but remain well below their levels at the beginning of the year."

The Fed reiterated that the coronavirus outbreak “poses considerable risks to the economic outlook over the medium term” and said rates would be held near zero “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” 

Fed Chairman Jerome Powell said the U.S. economy needed further support from Congress.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in Charlotte, said the market was only hearing the "lower rates for longer" part of the Fed's statement "but it is either not hearing, or not believing, the other half of the statement, which is that the Fed believes the economy will not recover for a longer period of time as long as the virus case counts rise."

2. -- Apple, Amazon, Alphabet and Facebook Report Earnings

Earnings reports are expected Thursday from Apple  (AAPL) - Get Report, Facebook  (FB) - Get Report, Amazon.com  (AMZN) - Get Report, Google parent Alphabet  (GOOGL) - Get Report, Ford  (F) - Get Report, Comcast  (CMCSA) - Get Report, Kraft Heinz  (KHC) - Get Report, DuPont  (DD) - Get Report, Gilead Sciences  (GILD) - Get Report and MGM Resorts  (MGM) - Get Report.

Procter & Gamble  (PG) - Get Report posted stronger-than-expected fourth-quarter earnings and issued a robust profit forecast for the coming fiscal year as fabric and home sales offset slumping revenue in skin and personal care.

United Parcel Service  (UPS) - Get Report delivered adjusted per-share earnings in the second quarter more than double what analysts were forecasting, as the pandemic drove consumers and businesses to rely on the shipping giant for getting packages to their front doors.

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Apple, Facebook, Amazon, Alphabet and DuPont are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.

The economic calendar Thursday includes second-quarter Gross Domestic Product at 8:30 a.m. ET. Growth in the U.S. is forecast by economists to have plummeted 34.6% in the quarter as the coronavirus pandemic severely stalled the economy. GDP contracted 5% in the first quarter.

The calendar also includes weekly Jobless Claims at 8:30 a.m. Economists expect the number of Americans filing for first-time unemployment benefits to have eased slightly to 1.4 million in the week ended July 25. Claims rose for the first time since March last week, up 109,000 to 1.416 million.

3. -- Big Tech Gets Grilled by Congress

The CEOs of four dominant tech giants faced tough questions about their business practices and defended themselves against a wide range of antitrust charges and other claims in a hearing before Congress that lasted for more than five hours.

"Many of the practices used by these companies have harmful economic effects," said Rep. David N. Cicilline (D-R.I.), chairman of the House Judiciary's Antitrust Subcommittee. "Simply put, they have too much power, staving off creativity and innovation ... killing the overall dynamism that is the engine of the American economy."

In an opening round of questions for Google CEO Sundar Pichai, Cicilline accused Google of stealing content from other companies to build up its business, and abusing its power to keep users within its family of sites, thus stifling competition.

Several lawmakers zeroed in on Amazon's Jeff Bezos, grilling Amazon's founder on the company's dual role as both a marketplace and a seller of private label products, as well as its history of undercutting competitors it considers a threat. 

Bezos said he couldn’t guarantee that Amazon hadn't accessed seller data to make competing products, an allegation the online retailing and tech giant previously has denied.

“We have a policy against using seller specific data to aid our private label business,” Bezos said. “But I can’t guarantee to you that that policy hasn’t been violated.”

Facebook's Mark Zuckerberg and Apple's Tim Cook also appeared before lawmakers on Wednesday.

4. -- Qualcomm Gets Boost From Huawei Settlement

Qualcomm  (QCOM) - Get Report was up 11.9% to $104.10 in premarket trading Thursday after the chip company said it expects fiscal fourth-quarter earnings above Wall Street estimates owing partly to a patent-license settlement with Huawei.

The company estimated it would earn $2.12 to $2.32 a share in the fourth quarter on revenue of $7.3 billion to $8.1 billion. Qualcomm said a settlement with China's Huawei would add about $1.38 a share to earnings and $1.8 billion to revenue.

Adjusted earnings, Qualcomm said, would amount to about $1.05 to $1.25 a share vs. analysts' forecasts of $1.09 a share.

Qualcomm's settlement with Huawei was coupled with a multiyear agreement for the Chinese company to license Qualcomm’s patented technologies.

“With the signing of the Huawei agreement we are now entering a period in which we have multiyear license agreements with every major handset OEM,” said Qualcomm CEO Steve Mollenkopf on a conference call.

5. -- AstraZeneca Says On Track for Late-Stage Trials of Coronavirus Vaccine

AstraZeneca  (AZN) - Get Report, the U.K. pharmaceutical giant, posted second-quarter earnings and sales better than analysts' forecasts, and said it was on track with late-stage trials for its coronavirus vaccine candidate.

The company said trials were taking place in the U.K., Brazil and South Africa and would soon begin in the United States.

AstraZeneca is one of the leaders in the race to develop a coronavirus vaccine through its partnership with Oxford University.