Thursday Morning Reads

Sounding the profit alarm

Sentiment was also dented by more corporate warnings, with AB InBev (NYSE:BUD) announcing it lost $170M in profits during the first two months of 2020 because of the coronavirus, as well as Microsoft (NASDAQ:MSFT) joining Apple (NASDAQ:AAPL) and HP (NYSE:HPQ) in saying it would miss guidance for the current quarter. Trouble in the travel and tourism sector is also set to continue after Booking Holdings (NASDAQ:BKNG) cautioned that room nights booked would drop 5% to 10% in the first quarter, while noting difficulty in forecasting the future.
Go deeper: PC stocks fall after Microsoft warning.

Pressure mounts on Fed

Dipping into uncharted waters, benchmark 10-year U.S. Treasury bond yields fell below 1.3% for the first time overnight, while the safe-haven yen rallied to 110.17 against the U.S. dollar. "I think the market is just pushing the Fed to cut rates," said Stuart Oakley, Nomura's global head of flow FX in Singapore. CME Group futures suggest at least a 41% chance of a March reduction, a 77% chance the Fed will move by April and a 90% chance of a cut by June.
Go deeper: 'Preparing For Record Low Treasury Rates With iShares TLT' by Josh Ortner.

Crude awakening

Even if OPEC slashes production by 600K barrels per day, the price of oil "could still be weak in March and April, before it improves in the summer," said Kang Wu, head of Asia analytics at S&P Global Platts. "A lot of inventory build up right now needs to be absorbed in April" amid lower crude demand due to the coronavirus outbreak. Oil meanwhile extended declines by 2% to $47/bbl - marking a 52-week low after sliding into correction territory - as some analysts suggested the possibility of a recession in China.

Latest coronavirus updates

Brazil has confirmed Latin America's first infection, while Pakistan, Sweden, Denmark, Norway, Greece, Romania and Algeria also reported their first cases. The IMF and the World Bank are meanwhile considering scaling back their Spring Meetings in April or holding them by teleconference, and the U.S. and South Korea postponed joint military drills. Australia additionally initiated emergency measures, Taiwan raised its epidemic response to its highest level and Saudi Arabia banned pilgrimages to Mecca.

What to watch

On the economic menu for today is the second estimate for fourth quarter GDP, which is expected to be unchanged at 2.1%, while durable goods orders for January are likely to show a 1.5% decrease (vs. 2.4% increase in the previous month). Economists are also estimating 214K Americans filed applications for unemployment benefits last week, up from the previous week's 210K claims. On the earnings front, we'll get results from Best Buy (NYSE:BBY), Dell (NYSE:DELL) and Baidu (NASDAQ:BIDU), as well as J.C. Penney (NYSE:JCP), Beyond Meat (NASDAQ:BYND) and Keurig Dr. Pepper (NYSE:KDP).

Mass shooting at Molson Coors plant

At least seven people were killed yesterday in a mass shooting at a Molson Coors (NYSE:TAP) facility in Milwaukee (police sources say the gunman was fired earlier in the day and died of a self-inflicted gunshot wound). Molson Coors CEO Gavin Hattersley, who was in Houston for the company's distributor convention, reportedly left the event early to fly to the plant. He said the office would be closed the rest of the week and the brewery shuttered "for the time being" to give people time to cope. TAP -2.7% premarket.

Self-driving milestone

California's self-driving car companies covered 2.9M miles in 2019, according to the state's DMV, with Alphabet's (GOOG, GOOGL) Waymo and General Motors' (NYSE:GM) Cruise leading the pack. However, a backlash is growing against the "disengagement" reporting metric, which reveals how frequently humans need to take control. Waymo had 13,219 miles between disengagements vs. 11,017 miles in 2018, while Cruise reported 12,221 miles between disengagements compared with 5,205 miles the previous year, though both companies say the stats are by no means definitive.

SpaceX Force

The U.S. Air Force, SpaceX (SPACE) and the newly created U.S. Space Force are teaming up for a "massive" live fire exercise in April that will conduct war games to practice intercepting an enemy missile and a drone. The test will also include submarines, battleships, and space-based weapons. While SpaceX has worked with the military before, sending up the top-secret Zuma spacecraft in 2018, its eventual Starlink constellation of more than 40,000 satellites (a division the company is thinking of taking public) is being viewed as a strategic asset.

Nokia rumors

Nokia (NYSE:NOK) finished the session 6.1% higher on Wednesday following reports that the company was exploring strategic options, though sources flagged by Reuters denied there was any truth to the rumors. According to Bloomberg, the firm hired advisers to explore a potential asset sale or combination, and even speculated about the prospect of a merger between it and Ericsson (NASDAQ:ERIC). The report didn't point to any discussions between the businesses, however, and noted such a deal would be hard to consummate due to European regulations. NOK -2.1% premarket.
Go deeper: Mark Hake says Nokia's stock is worth 45% more.

What else is happening...

Gilead (NASDAQ:GILD) initiates two Phase 3 studies for Covid-19.

U.S. stock exchanges prepared for coronavirus.

Trump says more NYT (NYSE:NYT) lawsuits are on the way.

Citi, BAML analysts see progress in GE's (NYSE:GE) annual report.

Canada warns freight rail delays to last 'many weeks.'