Wall Street continued its slide Tuesday morning as futures dropped on weak quarterly earnings and a historic plunge in U.S. crude oil prices, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
Wall Street fell on Monday as West Texas Intermediate crude crashed to minus-$40 for the first time in history as sweeping restrictions to contain the coronavirus hurt demand. With nowhere to store the excess capacity, traders fled from contracts that would deliver barrels of oil to them in May.
Exxon Mobil Corp. (NYSE: XOM) shed 3.7% in premarket trading and Chevron Corp. (NYSE: CVX) slipped 4% as the front-month May WTI contracts continued to trade below $0 on Tuesday. June contracts also fell by $4, signaling more weakness in demand amid a near halt in global activity.
Coca-Cola Co. (NYSE: KO) provided the latest evidence of the damage wrought by the pandemic, saying its current-quarter results would take a severe hit from low demand for soft drinks. The company reported earnings of $0.51 per share, up just $0.03 from the same period a year ago. It also pulled its 2020 full-year guidance.
Investors can also look forward to first-quarter earnings from major U.S. companies including Texas Instruments Inc. (Nasdaq: TXN) and Travelers Companies Inc. (NYSE: TRV) later in the day.
As of 9:20 a.m. EDT, Dow Jones futures were down 2.4%. S&P 500 futures dropped 2%, and Nasdaq Composite futures were off 1%.
Stocks to Watch Today
Boeing Co. (NYSE: BA) — As oil prices continue to tank, so does Boeing stock. Shares of the aircraft manufacturer dropped another 3.4% early Tuesday as airliners no longer require more fuel-efficient aircraft.
IBM Corp. (NYSE: IBM) — Shares of the technology company dropped 4.9% in premarket trading after it reported a decline in revenue and earnings. IBM said its earnings per share was $1.84, down from $2.25 a year ago. Its sales were down to $17.57 billion, missing analyst projections.
Hertz Global Holdings Inc. (NYSE: HTZ) — The car rental company said it was laying off 10,000 employees in North America to cut costs amid a downturn in business. The company said it would incur costs of $30 million related to the layoffs, which began April 14. Shares of Hertz were down 1.7%.
US Debt to Surge Past Wartime Record, Deficit to Quadruple
According to projections from the Committee for a Responsible Federal Budget, the coronavirus crisis has put the U.S. on track for a $4 trillion budget deficit this year.
Additionally, they projected the U.S. debt held by the public will surpass records set in the post-World War II years.
Before the COVID-19 pandemic, the U.S. debt-to-GDP nearly doubled to 79% in 2019. But, after the economy shutdown and $2.2 trillion worth of economic aid was passed by Congress, that debt is skyrocketing.
The Fed Is Buying $41B of Assets Daily
Central banks in the Group of Seven countries spent $1.4 trillion on financial assets in March — five times the previous monthly record set in April 2009, according to Bloomberg.
Morgan Stanley (NYSE: MS) estimates the Federal Reserve, European Central Bank, Bank of Japan and Bank of England will expand their balance sheets by a cumulative $6.8 trillion by the time all the buying is done.
Huawei’s Revenue Growth Slowed by Coronavirus, US Blacklist
The coronavirus and being blacklisted by the U.S. took a big chunk of revenue from one of the largest technology firms in China.
Huawei Technologies Co. reported quarterly revenue growth of just 1.4%, according to The Wall Street Journal. That was a slowdown from the 39% growth the company reported in the same quarter a year ago.
What We’re Reading
Why a Rising US Dollar Hurts Just About Everyone (Money & Markets)
No, Oil Below $0 Doesn’t Mean the Gas Station Will Pay You to Fill Up (CNN Business)
Ron Paul: Is the Lockdown Cure Worse Than the Disease for the Economy? (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Coca-Cola Co. (NYSE: KO)
Lockheed Martin Corp. (NYSE: LMT)
Navient Corp. (Nasdaq: NAVI)
Netflix Inc. (Nasdaq: NFLX)
Travelers Companies Inc. (NYSE: TRV)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.