Coronavirus watch, earnings, new home sales: 3 things to watch for in the markets on Wednesday


Here are the most important things to know about Wednesday before you hit the door.

1. Coronavirus watch

We'll be looking for updates on the coronavirus, a threat that has roiled through the markets causing a massive two-day sell-off in U.S. equities. Health officials at the Centers for Disease Control said Tuesday the coronavirus is "likely" to continue to spread throughout the United States and the American public should "prepare for the expectation that this is going to be bad." Following this, top White House economic advisor Larry Kudlow told CNBC that the U.S. economy is "holding up nicely" and that the coronavirus in this country is "pretty close to air-tight' containment. Any updates could determine the future direction of markets.

Investors are hoping to get some updates on the virus's impact on travel from Marriott, the world largest hotel operator and Bookings Holdings, the largest travel booking operator. Both companies report quarterly earnings on Wednesday. Both stocks are down nearly 15% this year thanks to the disruption in travel from the deadly virus.

2. More earnings

Lowe's also reports earnings before the bell on Wednesday. The home improvement retailer is expected to report earnings per share of $1.42 on revenue of $6.047 billion. This compares to the $1.31 per share on sales of $5.494 billion reported a year prior.

Lowe's is reporting on the heels of Home Depot's strong earnings on Tuesday. Home Depot shares rose amid a market sell-off after beating on the top and bottom lines, supported by strong holiday and appliance sales. Real estate stocks have outperformed the broader market recently thanks to low interest rates and a large amount of home owners refinancing their mortgages.

Shares of Lowe's are about flat for the year.

Retailer L Brands, payments company Square and online marketplace Etsy also report earnings on Wednesday.

3. New home sales expected to jump

New home sales data for January comes out at 10 a.m. ET and economists are expecting 711,000 single-family homes sold last month, up from 694,000 in December, according to Dow Jones. This would be a 2.4% jump in home sales month-over-month. Sales of new U.S. single-family homes unexpectedly fell in December, likely held down by a shortage of more affordable homes, but the housing market remains supported by lower mortgage rates.

The 10-year Treasury yield fell to a record low on Tuesday as coronavirus fears raised concerns about global economic growth and sent investors scrambling into the safety of U.S. government bonds.

"There's a limit to how much 10 year yields can dip without pushing the ENTIRE supply of outstanding 30 year mortgages into [refinance] eligibility," Strategas' Thomas Tzitzouris wrote in a note to clients Tuesday.

Major events (all times ET):

9:35 a.m. Dallas Fed Pres. Robert Kaplan speaks

10:00 a.m. New home sales

12:00 p.m. Apple annual shareholder meeting

1:00 p.m. Minneapolis Fed President Neel Kashkari speaks

Major earnings:

Lowe's (before the bell)

Papa John's (before the bell)

TJX (before the bell)

AMC Networks (before the bell)

Moderna (before the bell)

L Brands (after the bell)

Square (after the bell)

Booking Holdings (after the bell)

Marriott (after the bell)

Etsy (after the bell)