Here are five things you must know for Thursday, Aug. 1:
1. -- Stock Futures Rise After Fed Signals Future Rate Cuts Not Guaranteed
U.S. stock futures traded higher on Thursday, the day after the Federal Reserve cut interest rates for the first time in more than a decade but Fed Chairman Jerome Powell hinted that future cuts aren't guaranteed.
"We're thinking of it essentially as a mid-cycle adjustment to policy," Powell said during a press conference Wednesday following the Fed's announcement that it was slashing interest rates by 25 basis points. "I'm contrasting it with the beginning of a lengthy cutting cycle."
Contracts tied to the Dow Jones Industrial Average were up 42 points, futures for the S&P 500 rose 3.45 points, and Nasdaq futures gained 16.25 points.
Following the U.S. central bank's move on Wednesday to drop the target range for its overnight lending rate to 2% to 2.25%, the Dow had its biggest one-day decline since May 31, falling 333 points, or 1.23%, to 26,864. The S&P 500 fell 1.09% and the Nasdaq declined 1.19%.
"This action supports the committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain," the Fed said in announcing the rate cut.
"Weak global growth and trade tensions are having an effect on the U.S. economy," Powell said.
Donald Trump tweeted: "What the market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, the European Union and other countries around the world. As usual, Powell let us down."
For Thursday, the economic calendar in the U.S. includes weekly Jobless Claims at 8:30 a.m. ET, the PMI Manufacturing Index for July at 9:45 a.m., the ISM Manufacturing Index for July at 10 a.m., and Construction Spending for June at 10 a.m.
2. -- Verizon, GM and DuPont Report Earnings Thursday
The stock was up 1.32% to $56 in premarket trading.
DuPont (DD - Get Report) posted stronger-than-expected second-quarter earnings and boosted its full-year profit guidance as margins improved thanks to cost cuts and stronger pricing. The stock was up 1.44% in premarket trading to $73.20.
Earnings reports are also expected Thursday from Verizon Communications (VZ - Get Report) , General Motors (GM - Get Report) , U.S. Steel (X - Get Report) , Shopify (SHOP - Get Report) , Kellogg (K - Get Report) , Clorox (CLX - Get Report) , Etsy (ETSY - Get Report) , Wayfair (W - Get Report) , Yum Brands (YUM - Get Report) , Square (SQ - Get Report) , Pinterest (PINS) , GoPro (GPRO - Get Report) , Cigna (CI - Get Report) , Redfin (RDFN - Get Report) and Yeti Holdings (YETI) .
3. -- Qualcomm Slides on Weak Fourth-Quarter Forecast
Qualcomm was down 6.77% to $68.21 in premarket trading Thursday after the chipmaker said it expects fiscal fourth-quarter profit and sales below analysts' expectations.
The company forecast adjusted earnings of 65 cents to 75 cents a share in the period on revenue of $4.3 billion to $5.1 billion. Analysts had been expecting fourth-quarter profit of $1.09 a share on revenue of $5.67 billion.
Qualcomm said its forecast doesn't include payments from Chinese technology company Huawei, which has been blacklisted by the U.S. government.
"The second interim agreement with Huawei concluded in the third quarter of fiscal 2019, and although negotiations continue, we have not reached a final agreement with Huawei," Qualcomm said in a statement. "If no agreement is reached, Huawei may not make any other payments or may not make full payments under the underlying license agreement."
In its fiscal third quarter, Qualcomm posted adjusted earnings of 80 cents a share, 4 cents above analysts' estimates, while adjusted revenue of $4.9 billion missed forecasts.
"Our 5G design wins have doubled over the last three months, leaving us extremely well positioned as 5G ramps in early calendar year 2020," CEO Steve Mollenkopf said in a statement.
4. -- Lam Research's Adjusted Profit Tops Estimates
Lam Research's (LRCX - Get Report) fiscal fourth-quarter earnings fell sharply from a year earlier but adjusted profit beat analysts' estimates and the stock declined 1.16% in premarket trading to $206.20.
Lam Research reported adjusted earnings in the period of $3.62 a share, beating forecasts of $3.42. Revenue of $2.36 billion fell from $3.13 billion in the year-earlier but mostly matched Wall Street forecasts.
The semiconductor equipment manufacturer said it expects fiscal first-quarter revenue of $2 billion to $2.3 billion vs. expectations of $2.28 billion, and earnings of $2.91 a share, plus or minus 20 cents.
"Lam's June quarter results reflect our strong track record of execution," said CEO Tim Archer. "We are making solid progress on our innovation roadmap, and with multiple technology inflections ahead of us, Lam is in an excellent position to win."
"We will look for weakness to repurchase the shares we sold higher as we maintain the view that while we may have to face some pressure in the near-term, expectations for the coming capex inflection, combined with the robust buyback program will provide a meaningful floor of support, especially given the fact that with $3 billion left in the share repurchase authorization, management can buy back ~10% of shares outstanding," said Jim Cramer and the Action Alerts PLUS team, which holds Lam Research in its portfolio.
5. -- Twilio Dips Despite Solid Earnings Report
Twilio (TWLO - Get Report) , the cloud-based communications company, fell 0.8% in premarket trading to $138 despite matching Wall Street's second-quarter earnings predictions and a jump in quarterly revenue of 86%.
Twilio posted earnings of 3 cents a share, a reversal from a year-earlier loss of 3 cents, while revenue of $275 million jumped from $147.8 million a year earlier and topped estimates of $264 million. Customers rose to 161,000 from 57,000 a year earlier.
For the third quarter, Twilio said it expects profit of 2 cent a share on revenue of $289 million vs. Wall Street's expectations for earnings of 1 cent on revenue of $285.6 million.
"We celebrated a big milestone in the second quarter, crossing the $1 billion annualized revenue run rate," said CEO Jeff Lawson. "We see this as just the beginning, as we have the opportunity to change communications and customer engagement for decades to come. This is Day One and we're just getting started."
In an interview with TheStreet, Twilio Chief Financial Officer Khozema Shipchandler was upbeat about the company's outlook, saying that the growth in revenue is broad-based across its organic holdings in addition to SendGrid, which it acquired in October 2018 for $2 billion in stock.
Last quarter was the first full quarter since the deal closed, and SendGrid adds email API capability to Twilio's portfolio, which was otherwise centered around calling, SMS and videoconferencing products for customer service use.
"Its very early; we've only owned the company for five months. Opportunities to cross-sell and things of that nature are just now starting to take hold," said Shipchandler. "We're just now seeing what we can do from a SendGrid perspectives."
"Twilio isn't cheap, but as we detailed on our July members only conference call here, this is a growth story with plenty of room to go," said Jim Cramer and the Action Alerts PLUS team, which holds Twilio in its portfolio.
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