Here are five things you must know for Tuesday, April 27:
1. — Stock Futures Rise on Solid Corporate Earnings
Stock futures rose Tuesday, a day after solid corporate earnings reports pushed the S&P 500 to another record high.
The Federal Reserve begins a two-day meeting Tuesday. Investors don’t expect the central bank to make any policy changes and to leave asset purchases unchanged. However, Wall Street will be paying close attention to indications of when the Fed might begin to trim its $120 billion in monthly asset purchases and its outlook on inflation.
Contracts linked to the Dow Jones Industrial Average rose 30 points, S&P 500 futures were up 4 points and Nasdaq futures rose 16 points.
Earnings will grab investors’ attention Tuesday, with reports expected from companies such as Alphabet (GOOGL) – Get Report, Advanced Micro Devices (AMD) – Get Report, Microsoft (MSFT) – Get Report and General Electric (GE) – Get Report.
According to FactSet, a quarter of the companies in the S&P 500 have so far reported first-quarter results, and 84% of them have topped analysts’ expectations. That is above the 77% one-year average and a record high, FactSet said, since it started tracking the data in 2008.
The S&P 500 and Nasdaq closed at records Monday as investors focused on the busiest week of earnings season. The S&P 500 closed up 0.18% to 4,187, while the Nasdaq finished up 0.87% to 14,138. The Dow fell 0.18%.
Danielle DiMartino Booth, CEO and chief strategist of Quill Intelligence, said she believes the announcement from the Fed Wednesday afternoon was “arguably the most important statement so far this year, as investors are increasingly trying to figure out when the Fed may start to pare back its COVID-19-related stimulus, since the economy is recovering at a faster-than-expected rate.”
2. — Tesla Posts Record Earnings as Revenue Surges 74%
The electric vehicle company notched its seventh-consecutive quarterly profit and forecast late 2021 launches for planned gigafactories in the U.S. and Germany.
Net profit on a GAAP basis reached a quarterly record of $438 million.
Tesla, which purchased $1.5 billion in bitcoin earlier this year, also revealed that it boosted its first-quarter earnings by $101 million through the sale of the world’s largest cryptocurrency.
Credit Suisse analyst Dan Levy estimated profit from bitcoin, regulatory credits and tax benefits added about 25 cents a share to Tesla’s adjusted earnings in the period of 93 cents, higher than analysts’ estimates of 79 cents.
Revenue in the first quarter rose 74.3% from last year to $10.39 billion, just ahead of analysts’ forecasts of $10.3 billion. Regulatory credit sales rose 46.3% from last year to $518 million.
Earlier this month, Tesla said it delivered 184,800 new cars over the three months ended in March, a record total that included the production of 180,338 Model 3s and Model Ys.
China accounted for around 37.5% of that total, with the China Passenger Car Association showing 69,280 units sold in the world’s largest car market following the launch of Tesla’s Shanghai gigafactory in 2019.
Tesla said new gigafactories in Berlin and Austin likely will come online later this year, but provided few details as to when – and at what rate – production would begin, apart from CEO Elon Musk telling investors that 2021 output would be “limited.”
Telsa shares were down 2.64% in premarket trading Tuesday to $718.70.
3.– Tuesday’s Calendar: Alphabet, Microsoft, GE and AMD Earnings
Earnings reports are expected Tuesday from Alphabet, Microsoft, General Electric, United Parcel Service (UPS) – Get Report, Starbucks (SBUX) – Get Report, Eli Lilly (LLY) – Get Report, Advanced Micro Devices, Pinterest (PINS) – Get Report, Texas Instruments (TXN) – Get Report and Visa (V) – Get Report.
Alphabet, Microsoft, AMD, Eli Lilly, Starbucks and United Parcel Service 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.
The U.S. economic calendar Tuesday includes the first day of a two-day meeting of the Federal Reserve, the Case-Shiller Home Price Index for February at 9 a.m. and Consumer Confidence for April at 10 a.m.
4. — Lyft to Sell Self-Driving Car Unit
Lyft (LYFT) – Get Report agreed to sell its Level 5 self-driving vehicle division to a unit of Toyota (TM) – Get Report for $550 million.
The ridesharing company said the deal will accelerate its path to profitability, largely by reducing spending on research and development.
Level 5 is being sold to Woven Planet Holdings, a subsidiary of Toyota. Lyft launched its Level 5 unit in 2017 to develop its own self-driving technology. The company said it will now focus on its open platform unit to integrate third-party self-driving technologies with its dispatching network.
“This partnership will help pull in our profitability timeline,” Lyft co-founder and President John Zimmer said in a statement. “Assuming the transaction closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.”
5. — GameStop Jumps After Completing Equity Offering
GameStop (GME) – Get Report was rising more than 7% in premarket trading after the video-game retailer raised $551 million from a previously announced “at-the-market” equity offering of 3.5 million shares.
GameStop, which saw its stock surge earlier this year during a Reddit-fueled trading frenzy, has gained 850% so far this year. Reuters calculated the average price of the shares sold in the equity offering was $157.43.
The stock rose early Tuesday by 7.78% to $182.08.