Stock futures see-sawed after President Donald Trump reversed course Sunday and extended stay-at-home guidelines until the end of April, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
On Sunday, Trump decided against a plan to get the U.S. economy up and running by the middle of April after a top medical adviser said more than 100,000 Americans could die from the coronavirus if mitigation levels weren’t successful.
Instead, Trump extended social distancing guidelines through April 30.
The decision had an immediate impact on the price of oil as fears the global shutdown could last months, pushing demand even lower.
What about oil: At one point, West Texas Intermediate crude dropped as low as $19.92 a barrel. The international benchmark for oil prices, Brent crude, fell to its lowest point since November 2002 — $22.58 a barrel. Both, however, moved slightly higher.
Analysts said the price of oil is so low that it’s becoming unprofitable for many oil firms to remain active. Higher-cost producers will have to shut off production since storage capacities are nearly full.
“Global oil demand is evaporating on the back of COVID-19-related travel restrictions and social distancing measures,” UBS oil analyst Giovanni Staunovo said. “In the near term, oil prices may need to trade lower into the cash cost curve to trigger production shut-ins to start to prevent tank tops to be reached.”
How about equities: As of 9:20 a.m. EDT, markets were up slightly. Dow Jones futures were up 1%. S&P 500 futures were up 1.3% while Nasdaq Composite futures moved 1.4% higher.
Stocks to Watch Today
Johnson & Johnson (NYSE: JNJ) — Shares of the multinational company were up 5.2% on news it has a lead vaccine candidate for COVID-19, in partnership with the U.S. Department of Health & Human Services. The company said it will start phase one human clinical trials by September 2020.
Abbott Laboratories (NYSE: ABT) — The American medical device manufacturer said it has received emergency approval for a coronavirus test that can detect positive results in as little as five minutes. Shares of Abbott were up nearly 9%.
Eldorado Resorts Inc. (Nasdaq: ERI) — Shares of the hotel and casino company dropped 12% after a report its $17.3 billion bid to buy Caesars Entertainment Corp. (Nasdaq: CZR) could be in jeopardy due to the coronavirus. The deal would create a company carrying more than $21 billion in debt.
News You Can Use
On Monday, China’s major provinces started full production, two months after a near-nationwide shutdown of factories, workplaces and retail outlets, according to Chinese officials.
China’s Health Commission reported just 31 new cases of COVID-19 Monday, nearly all were people who had recently traveled abroad.
Chinese state media said shopping malls in Wuhan — the center of the virus spread — reopened for business on Monday. The vice minister of information and technology told reporters 98.6% of major industrial companies in the county have resumed operations.
Mortgage Bankers Ask SEC to Save Them From Wave of Margin Calls
The Mortgage Bankers Association asked the Securities and Exchange Commission to issue guidance directing brokers to work with lenders on Sunday.
In a letter sent Sunday, the association said it feared the Federal Reserve’s emergency purchases of bonds would have an unintentional consequence of margin calls on hedges lenders have entered to protect against losses.
Apple Supplier Foxconn’s Profit Drops in Q4
Taiwan-based Foxconn Technology saw its fourth-quarter profit drop 23.7% before the coronavirus pandemic hit the electronics assembler and its largest customer, Apple Inc. (Nasdaq: AAPL).
Foxconn reported its net profit in the fourth quarter was $1.6 billion with a quarterly revenue decline of 3.8%.
Apple has been hammered by a drop in both supply of its products and demand for them as the virus spread has expanded globally.
Apple shares were up 0.4% in premarket trading.
What We’re Reading
Bonner: Coronavirus Fears Spark Gold Shortages (Money & Markets)
EasyJet Grounds It’s Entire Fleet (CNN Business)
Recession May Force Many to Take Social Security Earlier Than Planned (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Alpine Immune Sciences Inc. (Nasdaq: ALPN)
Cal-Maine Foods Inc. (Nasdaq: CALM)
Edap Tms SA (Nasdaq: EDAP)
Restoration Hardware Holdings Inc. (NYSE: RH)
Sunworks Inc. (Nasdaq: SUNW)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.
