Apple, Starbucks, and Powell — What you need to know on Thursday

Myles Udland
Markets Reporter

The news will not let up this week.

On Thursday, earnings from Apple (AAPL), the world’s biggest company, and Starbucks (SBUX) will highlight the earnings calendar.

While a lot of the market’s focus is likely to be on the Federal Reserve, as President Donald Trump is expected to name Fed governor Jerome Powell to replace Janet Yellen as Chair of the central bank. The Wall Street Journal reported late Wednesday that Trump will announce Powell as Yellen’s replacement, putting the president’s pick in-line with where market consensus had coalesced in recent days.

“Markets should take a Powell announcement largely in stride, keeping financial conditions easy and providing little disruption to an economy that is experiencing solid growth,” said Peter Hooper, an economist at Deutsche Bank.

Federal Reserve governor Jerome Powell is slated to be named the successor to Janet Yellen as Chair of the central bank by President Donald Trump on Thursday.

“In addition, Powell has now had five years experience working inside the Fed, by all reports very effectively on both macroeconomics/monetary policy and on regulatory policy. He seems well versed in both important spheres of Fed responsibility.”

Tom Porcelli, chief U.S. economist at RBC Capital Markets, said last week that Powell, “would be a natural extension of Yellen at a point where policy is not screaming for a wildly different policy approach.”

Futures were little-changed on Wednesday night after headlines crossed that Powell would in fact be Trump’s pick.

On the earnings side, Apple earnings are always a big event, with Wall Street analysts expecting the company will report earnings per share of $1.87 on revenue of $50.5 billion.

iPhone unit sales are expected to total 46.1 million with an average selling price of $633. According to data from Bloomberg, Apple shares are expected to move 4.8% after earnings according to options pricing, and the stock has moved higher after six of its last 12 earnings announcements.

Shares of Apple are up 44% year-to-date.

Apple CEO Tim Cook speaks at The Bloomberg Global Business Forum in New York, U.S., September 20, 2017. REUTERS/Brendan Mcdermid

Elsewhere on the earnings calendar, results are expected from Yum Brands (YUM), ADP (ADP), Western Union (WU), Ralph Lauren (RL), CBS (CBS), AIG (AIG), and Cigna (CI).

Investors will also be tracking shares of Facebook (FB), which were trading at a record high after hours on Wednesday despite CEO Mark Zuckerberg saying in the company’s earnings release that, “We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.”

Also on the docket for Thursday is an expected announcement from House Republicans of a draft outline of their tax bill. Reports Wednesday said Trump wants to call the bill the “Cut, Cut, Cut Act,” while Politico reported that tensions among GOP lawmakers were “very high” as of late Wednesday afternoon, notably among Republican representative from Democratic states.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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