U.S. stock market futures are on the slide as tensions between Washington and Beijing grow over the origins of the COVID-19 virus, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
On Sunday, U.S. Secretary of State Mike Pompeo said there was “a significant amount of evidence” that a Chinese laboratory was the origin of the coronavirus.
He did not, however, dispute U.S. intelligence reports that the virus was not man-made.
The latest news came after Wall Street opened the month of May on a down note Friday after President Donald Trump discussed the possibility of new tariffs against China in response to the outbreak.
The S&P 500’s 29% recovery from its March lows stands to be tested as investors weigh renewed trade tensions and the health crisis while businesses gradually reopen.
Shares of Delta Air Lines Inc. (NYSE: DAL), American Airlines Group Inc. (Nasdaq: AAL), Southwest Airlines Co. (NYSE: LUV) and United Airlines Holdings Inc. (Nasdaq: UAL) slumped between 6.6% and 10.5% in premarket trading as Berkshire Hathaway Inc. (NYSE: BRK.B) sold its entire stakes in the four largest U.S. airlines in April.
Investors are also awaiting factory orders data for March, which is expected to show a sharp decline.
As of 9:20 a.m. EDT, Dow Jones futures were off 1.2%. S&P 500 futures were down 0.8% and Nasdaq Composite futures fell 0.7%.
Stocks to Watch Today
Comcast Corp. (Nasdaq: CMCSA) — The company’s NBCUniversal division is looking at cost-cutting actions in its media and entertainment properties, including layoffs, according to The Wall Street Journal. Shares of Comcast were up 0.5%.
Berkshire Hathaway Inc. (NYSE: BRK.B) — Shares of the multinational holding company dropped 1% in premarket trading after the company posted a $50 billion quarterly loss and sold its entire stake in the four largest U.S. airlines.
Intel Corp. (Nasdaq: INTC) — The tech company is reportedly in talks to acquire Israeli startup Moovit for $1 billion, according to Calcalist. Moovit developed a mobile navigation app providing real-time public transit information in 3,100 cities and 102 countries. Shares of Intel were down nearly 1%.
Elliott Management Funding Lawsuit Against Quibi
Sources told The Wall Street Journal that hedge fund Elliott Management Corp. is backing a lawsuit against new streaming service Quibi — which was founded by Hollywood veteran Jeffrey Katzenberg.
Elliott will end up with an equity stake in the interactive video company Eko, which claims Quibi violated its patents and stole trade secrets.
The suit surrounds Quibi’s feature “Turnstyle,” which plays different videos for users based on how they are holding their phone.
Small Banks Come Out Heroes in PPP Loans
According to the Department of the Treasury and Small Business Administration, 60% of approved loans in the first round of the Paycheck Protection Program were approved by banks with under $10 billion in assets.
Even smaller banks fared better. Banks with less than $1 billion in assets account for only 6% of all U.S. banking assets, but they approved nearly 20% of the PPP loan dollars, according to The Wall Street Journal.
J.Crew Group Becomes First National Retailer to Fall Victim to Lockdown
The operator to J.Crew and Madewell brands, J.Crew Group, is the first national U.S. retailer to file for bankruptcy protection, according to CNN Business.
The company said Monday it had started the process of filing for Chapter 11 bankruptcy protection. It also said it had reached a deal with its lenders to convert nearly $1.65 billion of debt into equity.
What We’re Reading
Service Sector Stocks to Buy When the Lockdown Ends (Money & Markets)
Populous Cities Lose Appeal Amid COVID-19 Pandemic (USA Today)
The Bull & The Bear: Roth IRA vs. 401(k), AI Sector Explosion and Adam O’Dell (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Diamondback Energy Inc. (Nasdaq: FANG)
Ferrari NV (NYSE: RACE)
Nextgen Healthcare Inc. (Nasdaq: NXGN)
Realty Income Corp. (NYSE: O)
Skyworks Solutions Inc. (Nasdaq: SWKS)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.