Apple, General Electric, Boeing, Microsoft and AMD - 5 Things You Must Know Wednesday

Stock futures rise as investors look for support from Apple's much stronger-than-expected earnings; Microsoft, Facebook, Boeing, GE and Tesla report earnings; the Fed is expected to leave interest rates unchanged.
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Here are five things you must know for Wednesday, Jan. 29:

1. -- Stock Futures Higher as Apple Provides a Boost

Stock futures were higher Wednesday as investors looked for support from a much stronger-than-expected quarterly earnings report from Apple  (AAPL) - Get Report that, for now, was offsetting concerns over the spread of the coronavirus in Asia.

Contracts linked to the Dow Jones Industrial Average were up 107 points, futures for the S&P 500 gained 12.45 points and Nasdaq futures rose 48.25 points.

The spread of the coronavirus, however, has showed no signs of abating with the number of confirmed cases rising past 6,000, a figure greater than the total number of infections from the SARS outbreak in 2003. The number of fatalities also risen sharply to 132.

While Wall Street was poised to open slightly higher ahead of another busy day of corporate earnings reports, investors also will be looking to the Federal Reserve's policy statement at 2 p.m. ET Wednesday. Although economists are expecting the Fed to make no changes to interest rates, Chairman Jerome Powell could signal tweaks to the central bank's schedule of $60 billion a month in bond purchases.

The economic calendar in the U.S. Wednesday also includes International Trade in Goods for December at 8:30 a.m., the Pending Home Sales Index for December at 10 a.m. and Oil Inventories for the week ended Jan. 24 at 10:30 a.m.

2. -- Microsoft, Facebook, Boeing, GE and Tesla Report Earnings

General Electric  (GE) - Get Report posted stronger-than-expected fourth-quarter earnings and said its 2020 industrial profits and cash flow will improve notably in 2020 as the ongoing turnaround under CEO Larry Culp continues to win over investors.

AT&T's  (T) - Get Report fourth-quarter earnings topped estimates and the telecommunications, media and entertainment giant reaffirmed its full-year profit guidance as it prepares for its launch of its HBO Max streaming service later this year.

McDonald's  (MCD) - Get Report reported fourth-quarter earnings and revenue that beat Wall Street's expectations.

Earnings reports are expected Wednesday from Microsoft  (MSFT) - Get Report, Facebook  (FB) - Get Report, Boeing  (BA) - Get Report, Tesla  (TSLA,) - Get Report Mastercard  (MA) - Get Report, Lam Research  (LRCX) - Get Report, PayPal  (PYPL) - Get Report, Las Vegas Sands  (LVS) - Get Report, Qorvo  (QRVO) - Get Report and Dow Inc.  (DOW) - Get Report.

Microsoft, Facebook, Mastercard and Lam Research 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. 

3. -- Apple Smashes Estimates but Virus Concerns Linger

Apple smashed fiscal first-quarter earnings forecasts, thanks in part to robust demand for its new suite of iPhones.

Apple said earnings for the three months ended Dec. 28, were $4.99 a share, well ahead of the Wall Street forecast of $4.55. Revenue rose 9% from last year to $91.8 billion and topped estimates of $88.4 billion.

For its second fiscal quarter, Apple said it sees revenue in the range of $63 billion to $67 billion, firmly ahead of the Wall Street consensus of $62.4 billion.

“We are thrilled to report Apple’s highest quarterly revenue ever, fueled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables,” said CEO Tim Cook. “During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion."

"We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers - and a great driver of our growth across the board,” he added.

Apple did caution, however, that it was monitoring the spread of the coronavirus "very closely" in China, where around 380 manufacturing facilities feed into its supply chain, and noted some impact from China's decision to extend some Lunar New Year business re-openings until Feb. 10.

"Bottom line, we believe the release to once again back our view that shares of AAPL are to be owned, not traded as the company continues to fire on all cylinders," said Jim Cramer and the Action Alerts PLUS team, which holds Apple in its portfolio.

"We remain cognizant that the coronavirus may still have an impact on Apple's near-term growth in China - and again, this is being accounted for in guidance with the wider-than-usual revenue range," Cramer and the AAP team said. "But we believe the macroeconomic backdrop following the official signing of the first phase of the trade deal to be markedly improved, given not only the progress made in the deal, but because it brings us that much closer to an all-encompassing deal."

Apple shares rose 2.29% to $324.95 in premarket trading Wednesday.

4. -- AMD Slumps on Weak First-Quarter Revenue Guidance

Advanced Micro Devices  (AMD) - Get Report slumped in premarket trading Wednesday after the chipmaker issued a soft forecast for first-quarter revenue.

AMD said it expects revenue in the period of $1.75 billion to $1.85 billion, while analysts had been estimating $1.86 billion.

The quarter is expected to be weighed down by softer semi-custom revenue streams, AMD said, which are expected to ease ahead of the ramp of its next-generation products.

“Our focused execution and the investments we made in our high-performance computing road maps position us well for continued growth in 2020 and beyond,” CEO Lisa Su said in a statement. 

The company estimated 2020 revenue growth of about 28% to 30%, in line with forecasts.

Fourth-quarter adjusted earnings at AMD were 32 cents a share, topping expectations by 1 cent. Revenue was $2.13 billion, up 50% from $1.42 billion and higher than forecasts of $2.11 billion.

The stock fell 4.1% to $48.46 in premarket trading.

5. -- Starbucks Closes Half Its China Stores Amid Virus Outbreak

Starbucks  (SBUX) - Get Report, the Seattle coffee giant, reported fiscal first-quarter earnings that topped analysts' estimates but warned the coronavirus outbreak could hit profit in 2020.

The company said due to the outbreak of the coronavirus in China it temporarily has closed more than half its stores there; Starbucks had close to 4,300 stores in China at the end of 2019. Starbucks said it expects a material impact on its fiscal second-quarter and full-year results from the disruption but wasn't more specific.

”Given the dynamic nature of these circumstances, the duration of business disruption, reduced customer traffic and related financial impact cannot be reasonably estimated at this time but are expected to materially affect our international segment and consolidated results for the second quarter and full year of fiscal 2020,” Starbucks said, adding it would update its fiscal 2020 guidance whenever it can “reasonably estimate the impact of the coronavirus."

"Our best assessment at the moment is that we could see some downside in the stock because the implications of the coronavirus in China still might get worse before it gets better, setting SBUX up for some near-term weakness," said Jim Cramer and the Action Alerts PLUS team, which holds Starbucks in its portfolio. "But long term, we like the trends we saw here with the strength in U.S. comps, the rapid adoption of the Rewards program in China, and the positive contribution to margins through sales leverage."