US stock futures declined sharply on Thursday, following heavy losses overnight in Asia, on fears that an increasingly severe outbreak of coronavirus may dampen prospects for global economic growth.
The quickly spreading virus is weighing on the economic outlook of China and other countries, as global and domestic travel is curtailed, disrupting business operations, in an attempt to contain the virus’s spread; some economists have begun to cut their growth forecasts.
Following Wednesday’s Fed gathering, where officials had decided to leave benchmark interest rates unchanged, as expected, Chairman Powell said the outbreak of the virus will likely hit the Chinese economy and could spill wider, adding that it was too early to assess US-impact.
Stock prices finished mixed yesterday (SPY: -0.08%), as investors looked for support from stronger-than-expected earnings from Apple (AAPL: +2.09%), while the Federal Reserve left interest rates steady.
The World Health Organization is scheduled to meet later today, in Geneva, amid speculation that the agency could label the outbreak as a global health crisis; which would trigger deeper travel restrictions in and out of China, the world's second-largest economy.
Ahead, in today’s economic calendar, Thursday includes; Weekly Jobless Claims and the fourth-quarter Gross Domestic Product report at 8:30 am EST. Economists expect GDP in the quarter to increase at an annual pace of 2.1%, matching the pace of the third quarter.
Earnings are also continuing to roll in with; Coca-Cola's (KO), Verizon (VZ), Amazon.com (AMZN), Altria (MO), DuPont (DD), Visa (V), Raytheon (RTN), Electronic Arts (EA), Biogen (BIIB), United Parcel Service (UPS), Northrop Grumman (NOC), Eli Lilly (LLY), U.S. Steel (X) and Amgen (AMGN) all expected to report today.
TODAY'S TOP HEADLINES
China: Death Toll Climbs to 170 and Economic Threat Grows. (Bloomberg)
The coronavirus death toll rose to 170 and confirmed cases in China soared past 7,700, with ripple effects of the spreading illness raising threats to the economy.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:30AM - ★☆☆ - Weekly Jobless Claims (Previous: 211,000)
08:30AM - ★★★ - GDP (QoQ) (Q4) (Previous: 2.1%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Tesla (TSLA): [EARNINGS] Reported quarterly earnings of $2.14 per share, beating the consensus estimate of $1.72. Revenue also beat projections and the company said full-year 2020 deliveries should exceed 500,000.
Facebook (FB): [EARNINGS] Beat estimates by 3 cents a share, with quarterly profit of $2.56 per share. The company beat on the top line as well. The stock is under pressure, however, on concerns about profit margins and a sharp rise in expenses.
Microsoft (MSFT): [EARNINGS] Earned $1.51 per share for its latest quarter, topping estimates by 19 cents a share. Revenue also beat forecasts, boosted by continued growth in its cloud business.
PayPal (PYPL): [EARNINGS] Reported quarterly profit of 86 cents per share, 3 cents a share above estimates. Revenue was slightly above forecasts; however, the payment service gave a weaker-than-expected outlook for the current quarter and the full year.
DuPont (DD): [EARNINGS] Matched estimates with quarterly earnings of 95 cents per share. Revenue came in below estimates, however, and its earnings outlook for 2020 below consensus. The company said full-year results will be negatively impacted by nylon pricing declines, among other factors.
Mondelez (MDLZ): [EARNINGS] Came in a penny a share ahead of analysts’ forecasts, with quarterly earnings of 61 cents per share. The maker of Oreo cookies and other snacks also saw revenue beat estimates, however Mondelez said it expects current-quarter revenue to take a hit from the coronavirus outbreak.
Unilever (UL): [NEWS] Is beginning a strategic review of its tea business, which includes the Lipton and PG Tips brands. The consumer products company decided on the review as sales of traditional black tea slow in favor of herbal tea.
Hershey (HSY): [EARNINGS] Reported quarterly earnings of $1.28 per share, 4 cents a share above estimates. Revenue also topped estimates and the company gave an upbeat 2020 forecast, helped by price increases and investments in new products.
Eli Lilly (LLY): [EARNINGS] Beat estimates by 21 cents a share, with quarterly earnings of $1.73 per share. Revenue also came in above forecasts, driven by stronger sales of newer products introduced over the past five years.
Coca-Cola (KO): [EARNINGS] Matched estimates with quarterly earnings of 44 cents per share, with revenue above Street forecasts. Coca-Cola also said it had its largest market share gain – as measured by value – in nearly a decade.
Verizon (VZ): [EARNINGS] Missed estimates by a penny a share, with quarterly profit of $1.13 per share. Revenue beat forecasts, however, and Verizon saw 852,000 wireless retail postpaid net additions during the quarter.
Blackstone (BX): [EARNINGS] Reported distributable earnings of 72 cents per share, 5 cents a share above estimates. The private-equity firm said its assets under management increased 21% during 2019 to a record $571 billion.
United Parcel Service (UPS): [EARNINGS] Matched estimates with quarterly profit of $2.11 per share, but the package delivery company’s revenue missed forecasts.
Lyft (LYFT): [NEWS] Cut 90 jobs, about 1.6% of its workforce, impacting the ride-hailing company’s sales and marketing departments.
Altria (MO): [EARNINGS] Reported in-line adjusted earnings of $1.02 per share, but revenue came in below estimates. Altria took a fourth-quarter impairment charge of $4.1 billion related to its investment in e-cigarette maker Juul.
Align Technology (ALGN): [NEWS] Is expecting a $35 million hit to revenue due to virus-related business disruptions in China.
MOMENTUM STOCKS
GAINERS: GE, TNDM, PGR, LAUR
DECLINERS: XLNX, HES, KEYS, NYCB, ATUS, MMM
TODAY'S IPOs
Avadim Health (AHI) (Low: 14, High: 16) (Est. Vol: $75.0M)
Black Diamond Therapeutics (BDTX) (Price: 19) (Est. Vol: $201.1M)
InterPrivate Acquisition (IPV.U) (Price: 10) (Est. Vol: $175.0M)
