General Electric, Google, Boeing, Microsoft and the Fed - 5 Things You Must Know  Wednesday

Stock futures point higher as crude oil rallies; investors look ahead to comments from Federal Reserve Chairman Jerome Powell; earnings reports are expected from Microsoft, Facebook, Boeing, General Electric and Tesla.
Author:
Updated:
Original:

Here are five things you must know for Wednesday, April 29:

1. -- Stock Futures Rise as Wall Street Awaits the Fed, Mega-Cap Earnings

Stock futures pointed higher Wednesday as crude oil rallied, investors looked ahead to comments from Federal Reserve Chairman Jerome Powell and earnings reports after the closing bell from Microsoft  (MSFT) - Get Report, Facebook  (FB) - Get Report and Tesla  (TSLA) - Get Report.

General Electric  (GE) - Get Report posted weaker-than-expected first-quarter earnings and warned that current-quarter results would decline further amid a "material" hit from the global coronavirus pandemic.

GE reported first-quarter adjusted earnings of 5 cents a share, 3 cents below analysts' estimates, while revenue of $20.52 billion beat forecasts of $20.38 billion.

Boeing  (BA) - Get Report reported a first-quarter adjusted loss of $1.70 a share on revenue of $16.9 billion vs. expectations of a loss of $1.61 a share on sales of $17.32 billion. The airplane maker said commercial airplane revenue in the first quarter fell 48% to $6.21 billion.

Boeing, however, insisted it could raise cash from financial markets and potentially avoid tapping government funds, and ceding equity, to steady the business.

Contracts linked to the Dow Jones Industrial Average rose 135 points, futures for the S&P 500 gained 18 points and Nasdaq futures were up 68 points.

Crude oil continued to swing wildly, with West Texas Intermediate crude for June delivery early Wednesday rising 15.4% to $14.24 a barrel. Traders have been betting that as economies slowly begin to reopen following lockdowns due to the coronavirus pandemic, demand for oil will increase.

The highlight of Wednesday's economic calendar will be an announcement from the Federal Reserve on interest rates at 2 p.m. ET and a press conference from Powell shortly thereafter.

The central bank lowered rates to near zero in mid-March and it's expected rates will remain there for the foreseeable future, according to economists.

The Fed said last month it would keep rates at near zero “until it is confident that the economy has weathered recent events.”

Powell likely will be questioned on the next steps the Fed can take to aid businesses and the economy through and out of the pandemic.

The calendar also includes the first estimate of first-quarter GDP from the Commerce Department. Economists expect U.S. growth to have fallen 3.7% in the period as the coronavirus pandemic severely stalled economic activity beginning in March.

2. -- Alphabet Jumps as Revenue Beats Estimates

Google parent Alphabet  (GOOGL) - Get Report was jumping 8% to $1,331.69 in premarket trading Wednesday after the search and ad giant posted better-than-expected revenue for the first quarter.

Revenue of $41.16 billion rose 13% from a year earlier and topped estimates of $40.82 billion.

Earnings, excluding a $1.7 billion penalty from the European Commission that recently cleared, were $9.87 a share, below estimates of $10.68.

“Our business, led by Search, YouTube, and Cloud, drove Alphabet revenues to $41.2 billion, up 13% vs. last year, or 15% on a constant currency basis,” said Alphabet Chief Financial Officer Ruth Porat. “Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues. We are sharpening our focus on executing more efficiently, while continuing to invest in our long-term opportunities.” 

Ad revenue for YouTube rose 33% to $4.04 billion, following 31% growth in the prior quarter. Google Cloud revenue rose 52% to $2.78 billion, a slight decrease from the prior quarter's 53% growth.

"Bottom line, we maintain the view that while the near term may be rocky and results will largely depend on progress in defeating the virus - the key factor determining how fast we can reopen the economy and therefore how fast ad spending will come back online - Alphabet remains a best-in-class company with the financial strength to not only survive this difficult period, but continue to invest during it, a luxury afforded to a select few and one that will allow the company to quickly regain momentum on the other side," said Jim Cramer and the Action Alerts PLUS team, which holds Alphabet in its portfolio.

3. -- AMD Slumps After Reducing Sales Expectations

Chipmaker Advanced Micro Devices  (AMD) - Get Report fell 2.43% to $54.16 in premarket trading after reducing sales expectations for the year because of the coronavirus pandemic.

AMD said it expects revenue to increase 20% to 30% for the year, down from previous projections of growth of 28% to 30%. Adjusted gross margin, the company said, is now expected at 44% vs. previous expectations of 45%.

“While we expect some uncertainty in the near-term demand environment, our financial foundation is solid and our strong product portfolio positions us well across a diverse set of resilient end markets,” said CEO Lisa Su in a statement.

AMD reported adjusted earnings in the first quarter of 18 cents a share, matching analysts' estimates, and revenue in the period rose to $1.79 billion, just topping forecasts.

For the second quarter, AMD said it expects revenue of $1.75 billion to $1.95 billion vs. estimates of $1.88 billion. 

4. -- Tesla, Mastercard and Qualcomm Report Earnings

In addition to Microsoft, Facebook, Boeing and General Electric, earnings reports are also expected Wednesday from Tesla  (TSLA) - Get Report, Mastercard  (MA) - Get Report, eBay  (EBAY) - Get Report, Yum! Brands  (YUM) - Get Report, Qualcomm  (QCOM) - Get Report, General Dynamics  (GD) - Get Report and Northrop Grumman  (NOC) - Get Report.

5. -- Ford Sees Second-Quarter Loss of $5 Billion

Ford  (F) - Get Report swung to a first-quarter loss of $2 billion and said its loss in the second quarter could widen to about $5 billion as the auto industry has been hammered by the coronavirus pandemic.

The automaker, however, said it had enough cash to carry it through the rest of 2020 even if its plants remained idled during the pandemic.

“We believe the company’s cash is sufficient to take us through the end of the year, even with no additional vehicle wholesales or financing actions,” said Chief Financial Officer Tim Stone in a statement.

Ford, the No. 2 U.S. automaker, also said it would cut spending on some of its projects, including a delay to 2022 of an autonomous vehicle service, and the cancelation of a Lincoln-brand electric vehicle.

StreetLightning Videos With Jim Cramer: