Monday Morning Reads
- May Not Be Big Enough
- China to Take on Wall Street
- Economic Pain Will Persist
- Pandemic Survival Plans
- ‘This Is Going to Kill Small-Town America’
- U.S. Meat Supply Is ‘Perilously Close’ To A Shortage, CEO Warns
- The Coronavirus Has Engulfed It In Crisis.
- Wealth Inequality Even Worse
- Dataroom and Biotechnology
- U.S. equities futures climb as virus may be slowing
- Realty Income declares $0.233 dividend
- JPMorgan Chase Q1 Earnings Preview
- Trump agreed to mitigation efforts at first recommendation: Coronavirus briefing
- Johnson & Johnson Q1 2020 Earnings Preview
- Tesla pursues rent reductions amid pandemic - WSJ
- Wells Fargo Q1 2020 Earnings Preview
- Organigram EPS misses by $0.03, beats on revenue
- Airline relief deal nears the finish line
- Barron's doubles down on 12 YTD winners
- Microsoft Teams has 20% adoption rate, says Slack CEO
- Chesapeake to implement 1-for-200 reverse split
U.S. stock futures rise, following gains in most equities markets around the world, amid optimism that the coronavirus curve is flattening. Dow futures advance 1.3%, Nasdaq gains 1.5% and S&P futures rise 1.2%. The 10-year Treasury yield remains flat at 0.75%. In overseas markets, the Stoxx Europe 600 rises 0.9% and the DAX gains 1.1%. In Asia, markets also ended the session in the green - the Hang Seng rose 0.6%, China’s CSI 300 rose 1.9% and the Nikkei 225 increased 3.1%. In the U.S., Q1 earnings season kicks off with JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Johnson & Johnson (NYSE:JNJ). With most of the coronavirus-related restrictions not taking effect until mid-March, investors will be focusing on any forward-looking commentary.
Though the world’s second-largest economy recorded a trade surplus of $18.5B in March, vs. a deficit of $7.1B in the first two months of the year, China will now be facing lower demand from the countries it exports to. "Uncertainties are on the rise and China’s foreign trade is encountering bigger difficulties," said Li Kuiwen, a customs spokesperson. Still, investors cheered the economic news. China’s CSI 300 Index closed up 1.9% and Japan’s Nikkei Index gained 3.1%. Hong Kong’s Hang Seng rose 0.5%.
Airline industry officials expect all major airlines to accept the terms for grants, with some announcements expected as early as today. The government has set identical terms for industry players and says it won't negotiate individually with airline managements. Those terms include a requirement that 30% of the funds allotted to each airline be repaid and the issuance of warrants with prices already locked in. The Treasury Department is not demanding compensation from small carriers receiving $100M or less in payroll support. If the $25B in grants is allotted as expected, the government could end up owning about 3.0% of American Airlines (NASDAQ:AAL), 2.3% of United Airlines (NASDAQ:UAL), 1.3% of JetBlue (NASDAQ:JBLU), 1% of Delta Air Lines (NYSE:DAL) and 0.6% of Southwest Airlines (NYSE:LUV).
Facing the need for cost savings amid the global pandemic, Tesla (NASDAQ:TSLA) is approaching landlords in search of reduced rent, the WSJ reports. "As a result of the increasing restrictions on our ability to conduct business, we would like to inform you that we will be reducing our monthly rent obligations effective immediately," reads one email the company sent. The news follows last week's announcement that Tesla would slash pay and furlough employees who couldn't work from home.
Go deeper: Look at Tesla’s balance sheet.
As widely expected, India is extending the world's biggest pandemic lockdown at least until May 3. The country's restrictions were set to end today, even as its confirmed case count crossed 10,000 and deaths hit 339 (low numbers compared to harder-hit countries, which experts caution may be due to low testing levels). Despite the extension of the restrictions, India has expressed an interest in at least partially restarting its manufacturing industry now rather than later.
The country’s economy was already weakening when the coronavirus hit, giving investors fewer reasons to buy Indian stocks and bonds, said BlackRock’s head of Asian credit, Neeraj Seth. "India entered the whole situation of COVID on a weaker footing," and the lockdown has put more pressure on the banking system, he told CNBC. BlackRock is cautious on Indian credit at the lower end of the spectrum, but fixed income investments could benefit as India’s central bank is expected to cut interest rates, he said.
Go deeper: Check ETF performance by country.
The oil giant raised $9.5B in debt on Monday, less than a month after issuing $8.5B, as it seeks to bolster its finances while the market is still receptive to issuers of new debt. In the latest offering, Exxon (NYSE:XOM) sold five different bonds with durations ranging from five to 31 years. The issue highlighted investor demand for the debt, as the offering was upsized from the $9B issue originally planned and Exxon was able to borrow at a lower price than the March deal.
Go deeper: Look into Exxon’s financials.
In Asia, Japan +3.1%. Hong Kong +0.56%. China +1.6%. India closed.
In Europe, at midday, London -0.37%. Paris -0.03%. Frankfurt +1.1%.
Futures at 6:00, Dow +1.3%. S&P +1.2%. Nasdaq +1.5%. Crude -1.6% to $22.06. Gold +0.1% to $1,763.40. Bitcoin +2.5% to $6,858.
Ten-year Treasury Yield flat at +0.75%