Here are five things you should know for Wednesday, July 28:
1. – Stock futures fluctuate following gains of US tech giants
Stock futures were volatile on Wednesday following the earnings of tech giants such as Apple, which fell slightly following warning of slowing sales growth.
Contracts related to the Dow Jones Industrial Average fell ten points, S&P 500 futures were up seven points and Nasdaq futures were up 38 points.
The produce on the benchmark 10-year Treasury rose on Wednesday to 1.244% as investors await a policy decision from the Federal Reserve. Central bank officials are expected to discuss when they might begin to roll back stimulus.
“We’re not expecting fireworks at this Fed meeting,” said LPL fixed income financial analyst Lawrence Gillum. “But we expect the committee to go further in discussing when and how to begin removing the emergency level monetary easing that it has been providing to the markets.”
The Fed’s policy statement is expected at 2 PM ET followed by Fed Chairman Jerome Powell’s press conference at 2:30 PM.
Cramer’s Mad Money Summary: GE, Apple, Starbucks, AMD
Earnings season continues to unfold Wednesday with reports from Facebook, PayPal, Pfizer, Shopify, McDonald’s, Qualcomm, Bristol Myers and Boeing.
Facebook, PayPal, Bristol Myers and Boeing Collectibles at Jim Kramer Member Club Work Alerts Plus. Want to be alerted prior Jim Cramer buys or sells stock? Learn more now.
Stocks closed lower on Tuesday as the S&P 500 ended its five-day winning streak. Sentiment was dented by the regulatory crackdown in China that sent tech stocks reeling and flustered about the growing delta variant of COVID-19.
2. – Earnings outpace Apple, but warnings of slowing growth
Apple reported much stronger-than-expected fiscal third-quarter gain amid rising iPhone sales and a big comeback in China, but the stock fell following the tech giant warned growth could slow.
In a conference call following its earnings report, Apple said supply constraints and chip shortages will affect the iPhone and iPad in the fiscal fourth quarter, while services growth will also suffer a slowdown.
“We expect very powerful year-over-year revenue growth during the September quarter,” said Luca Maestri, Apple’s chief financial officer, without providing details. “We expect revenue growth to be lower than the June quarter year-over-year growth of 36%.”
Apple reported third-quarter revenue of $81.4 billion, well overhead analyst estimates.
Maestri also said that Apple expects services growth to return to a “more model level”. The company said revenue in its services division rose 33% to $17.5 billion in the third quarter of the fiscal year.
Jim Cramer and the Action Alerts PLUS team, which carries Apple in its wallet, said. “As a result, we have a greater conviction in repeating our position,” do not trade “about stocks.”
Shares of Apple Inc fell 0.68% to $145.77 in pre-market trading on Wednesday.
3. – Increased profits and sales of Microsoft
Microsoft’s fiscal fourth-quarter earnings and revenue beat analysts’ expectations, but investor concerns about slowing growth in the company’s Azure division limited gains in pre-market trading.
Microsoft shares rose 0.37% to $287.60 in pre-market trading.
Microsoft reported fourth-quarter earnings of $2.17 per share on revenue of $46.2 billion. Analysts had expected earnings of $1.92 per share on sales of $44.2 billion.
As for Azure, the cloud computing company, sales increased by 51% but gains were partly driven by currency fluctuations; The number drops to
45% without this boost, which is a slowdown than prior
period, according to Bloomberg.
“While the stock valuation may be lofty from a historical perspective at 34.5x forward earnings (although we expect earnings estimates to rise following tonight’s release), we believe the higher multiple will be more than deserved given the company’s impressive turnaround under (CEO Satya). Nadella, who has made Microsoft so critical to the productivity of nearly every industry on the planet,” said Jim Kramer and the Action Alerts PLUS team, which carries Microsoft in its portfolio.
4. – Advanced Micro Devices Enhance Revenue Forecast
Shares of Advanced Micro Devices Inc rose more than 1% in premarket trading Wednesday following the chip maker boosted its packed-year revenue outlook following a powerful second quarter.
AMD said it expects annual revenue to rise 60%, compared to previous guidance of 50%. The company also said it expects third-quarter revenue to be about $4.1 billion, plus or minus $100 million. Analysts were calling for third-quarter revenue of $3.8 billion.
In the second quarter, AMD reported adjusted earnings of 63 cents per share as revenue rose 99% to $3.85 billion.
Revenue gains were driven by higher growth in both the Computing, Graphics, Corporate, Embedded and Semi-Dedicated segments.
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5. – Alphabet ad revenue jumped 69%
Alphabet, the parent company of Google, reported second-quarter revenue that beat Wall Street estimates and the stock rose more than 4% in pre-market trading on Wednesday.
Alphabet reported second-quarter earnings of $27.26 per share on revenue of $61.9 billion, an increase of 62% over the prior year. Analysts had expected the company to report earnings of $19.24 per share on revenue of $56.2 billion.
“In the second quarter, there was a growing wave of online activity in many parts of the world, and we are elated that our services have helped so many consumers and businesses,” said Sundar Pichai, CEO.
Sales from advertising totaled $50.44 billion in the quarter, up 69% from the previous year. Revenue from the YouTube advertising business was $7 billion, an increase of 84%.
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This article was originally published by The Street.