Futures for the S&P 500 index, Nasdaq 100 and Dow Jones industrial average edged higher early Wednesday ahead of a new wave of big earnings and the Federal Reserve's latest policy announcement.
Strong results late Tuesday from Texas Instruments (TXN) and AT&T (T), are good news for Apple (AAPL) and the iPhone ecosystem ahead of Apple's own earnings. Meanwhile, Facebook (FB) and PayPal (PYPL) are among four IBD 50 stocks with earnings due Wednesday, with Facebook providing further evidence that is beating back Snapchat operator Snap (SNAP).
X The Dow industrials rose 0.5% in Tuesday's regular session, led by earnings from Caterpillar (CAT) and McDonald's (MCD) as well as strength in financials. The Nasdaq composite, weighed down by Google-parent Alphabet (GOOGL), closed just above break-even, but did hit a new all-time high. The S&P 500 index rose 0.3% to a fresh record.
Meanwhile, the CBOE Volatility Index, or VIX, hit yet another record intraday low on Tuesday. VIX lows are a sign of investor complacency and often associated with at least short-term market tops.
Still, S&P 500 and Dow futures rose 0.1% vs. fair value and Nasdaq 100 futures 0.2% as equities generally advanced across the globe. Crude oil prices continued to climb after big gains Tuesday.
The Fed is not expected to make any policy changes Wednesday afternoon, though policymakers could surprise and announce a plan to let the central bank's $4.5 trillion balance sheet start to decline. Most analysts see that shift happening at the September meeting.
Apple
President Trump told the Wall Street Journal that Apple will build three plants in the U.S. Trump has made similar statements before. Apple had no comment Tuesday. U.S. operations would ease political pressures, but would likely be more expensive. It's possible that Foxconn, a key assembler of iPhones, could set up some plant in America.
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Meanwhile, Texas Instruments reported better-than-expected earnings late Tuesday and gave bullish guidance. Texas Instruments is big in automotive chips and many other segments, as well as in mobile devices like the Apple iPhone. But TI follows a beat-and-raise last week from Skyworks Solutions (SWKS), another Apple iPhone chipmaker and an IBD 50 member.
AT&T reported better-than-expected wireless subscriber figures, while churn hit a record low. That's a good sign for Apple iPhone sales during what could be a spring lull ahead of the iPhone 8 later this year. Relatively strong iPhone 7 demand is key, given the likelihood that the next-generation iPhone will be delayed.
Apple shares edged higher in premarket trading. Apple closed up 0.4% to 152.73 in Tuesday's stock market trading. Apple is approaching a 156.75 flat-base buy point.
Facebook Adds 5 Snapchats
Facebook, PayPal, Lam Research (LRCX) and Edwards Lifesciences (EW) are IBD 50 stocks reporting earnings on Wednesday. Also, Facebook, PayPal and Lam Research all boast a best-possible 99 Composite Rating, which means they outperform 99% of all other stocks based on proprietary fundamental and technical ratings. Big stock winners often have Composite Ratings of at least 95 near the start of their big price runs.
Facebook will be the third FANG (Facebook, Amazon.com (AMZN), Netflix (NFLX) and Google-parent Alphabet) stock to report Q2 results, following Alphabet late Monday and Netflix last week. Amazon is set to close out FANG earnings on Thursday.
Facebook will presumably provide some new figures about the growing popularity of Instagram Stories and other offerings that clone Snapchat features. But here's a stat that's already out. Since Snap's March 1 IPO, Facebook's market capitalization has increased by about $81 billion to $479 billion. Snap's market value has retreated to just $16.4 billion. So Facebook has added the equivalent of nearly five Snapchats in Snap's brief history as a public firm.
Facebook dipped 0.4% to 165.28 in Tuesday stock market trading after hitting a fresh record high on Monday. Facebook is extended from any possible entry. Snap fell 1.35% to 13.89, hitting a new record low.
PayPal, Lam Research, Edwards Lifesciences
PayPal dipped 0.55% to 58.26, just beyond the 5% chase zone from a 55.24 flat-base buy point cleared earlier this month. The mobile payments firm expanded its reach via deals this month with Apple and JPMorgan Chase (JPM).
Chip-equipment maker Lam Research is in cup base just below a possible buy point. Edwards Lifesciences has fallen back below a buy point in a big cup-with-handle base, undercutting its 50-day line on Tuesday.
Vertex Pharmaceuticals (VRTX), D.R. Horton (DHI), ServiceNow (NOW) and Fortinet (FTNT) are among the many other top-rated stocks set to report earnings Wednesday.
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