Morning Brief

What to watch today: Dow set for another sharp drop as oil prices deteriorate

BY THE NUMBERS

Dow futures were pointing to a sharp decline at Tuesday's open as longer-term U.S. oil futures start to deteriorate on slumping demand due to the coronavirus economic halt and storage space scarcity. The shocking oil moves are raising concerns about the extent of the economic damage being done by the coronavirus shutdowns, which in turn sent the Dow sinking nearly 600 points, or 2.4%, on Monday. (CNBC)

Coca-Cola (KO), one of the 30 Dow components, said Tuesday the closure of movie theaters, restaurants and stadiums from the coronavirus is continuing to hurt its business, with a material impact expected on its second-quarter results. The beverage giant's global volumes plunged 25% since the start of April. However, Coca-Cola reported that first-quarter adjusted profit of 51 cents per share on $8.6 billion in revenue got a short-term lift from consumers stock piling. (CNBC)

Travelers (TRV), another Dow stock, earned $2.62 per share for the first quarter, compared to estimates of $2.85 a share. Revenue, also short of forecasts, was hit by higher catastrophe losses. The insurance giant took $86 million in charges related to the coronavirus outbreak, but it did announce a 4% dividend hike. (CNBC)

This afternoon, Netflix (NFLX) reports its quarterly profit after the closing bell. Analysts expect the streaming giant to have earned $1.65 per share in the first quarter following the fourth-quarter's $1.30 per share. Netflix shares are up more than 30% year to date in the down market as it benefits from huge viewership from people forced to remain at home. (CNBC)

IBM (IBM) late Monday reported adjusted quarterly profit of $1.84 per share, beating estimates by 4 cents. However, revenue came in below forecasts. The company also withdrew its annual forecast due to uncertainties surrounding COVID-19. But it said it was well-positioned financially and would continue to pay dividends. (CNBC)

On today's economic calendar, the National Association of Realtors is out with existing home sales for March at 10 a.m. ET, with economists looking for a 7.5% drop to an annual rate of 5.34 million units. Sales jumped 6.5% in February. (CNBC)

IN THE NEWS TODAY

President Donald Trump is temporarily suspending immigration to the U.S. in response to the coronavirus pandemic. In a tweet Monday night, Trump attributed the virus's toll to an "attack from the Invisible Enemy" and said the country needs "to protect the jobs of our GREAT American Citizens." Globally, nearly 2.5 million people have been infected with over 170,000 deaths. (CNBC)

Leaders on Capitol Hill inched toward a $450 billion deal to help small businesses and hospitals hurt by the coronavirus. House Speaker Nancy Pelosi said negotiators have come to terms on the "principles" of the package. The Senate has set a session on Tuesday for a potential vote. The $350 billion allocated to a relief program for small businesses in last month's $2 trillion stimulus package ran out of money last week. (Reuters)

An analysis by The Associated Press showed that publicly traded firms got $300 million of those forgivable small business loans. Shake Shack, which received a maximum $10 million loan, said late Sunday it would return the money, saying the rules for the program were confusing.

More states run by Republican governors are announcing plans to reopen parts of their economies. Georgia's timetable, one of the most aggressive in the nation, would allow gyms, hair salons, bowling alleys and tattoo parlors to reopen Friday. Elective medical procedures would also resume. By Monday, movie theaters and restaurants could return. (AP)

In Tennessee and Ohio, most businesses will be allowed to reopen May 1. In South Carolina on Monday, businesses previously deemed nonessential such as department stores, flea markets, florists, bookstores and music shops were allowed to reopen. U.S. coronavirus cases approache 800,000 with 42,364 deaths. (AP)

* New coronavirus test plan would screen 30 million million per week, cost up to $100 billion (CNBC)
* Coronavirus 'likely' to have come from animals, not a lab, WHO says (CNBC)

The South Korean currency, the won, weakened sharply Tuesday against the dollar on unconfirmed reports that North Korean leader Kim Jong Un is seriously ill. The South Korean markets also saw declines. The North Korean leader was reportedly absent during a celebration of his grandfather's birthday on April 15, raising questions over his health. (CNBC)

* Trump signals he wants South Korea to pay more for US military presence there (CNBC)

Presumptive Democratic presidential nominee Joe Biden starts his general election fundraising push $187 million behind Trump, the presumptive GOP nominee. The sheer size of Trump's early advantage creates a unique set of financial and political pressures for Biden, reports The New York Times.

STOCKS TO WATCH

Philip Morris (PM) beat estimates by 8 cents a share, with quarterly earnings of $1.21 per share. Revenue also beat consensus. The company said the Covid-19 pandemic had limited impact during the quarter, but that it would hurt full-year results.

LabCorp (LH) received emergency authorization from the Food and Drug Administration for its at-home Covid-19 test. The test requires consumers to fill out a questionnaire and then get approval from a health-care provider.

Lockheed Martin (LMT) earned $6.08 per share for its latest quarter, beating the consensus estimate of $5.80 a share. Revenue also came in above analysts' projections. The company said it is just beginning to experience the impact of Covid-19 in its various businesses and that the ultimate impact on 2020 results is unknown.

SAP (SAP) abandoned its dual CEO structure that had been in place for the past six months, naming Christian Klein as sole CEO of the business software giant. SAP said the move was made to give customers more clarity, and that co-CEO Jennifer Morgan will depart April 30.

General Electric (GE) refinanced a $20 billion revolving credit facility with a new revolving agreement with $15 billion, according to an SEC filing.

J.M. Smucker (SJM) raised its sales and profit outlook, as consumers continue to stock up on household essentials amid the virus outbreak. The maker of Folgers Coffee and Jif Peanut Butter did say that the magnitude of sales increases has begun to moderate.

Hertz Global (HTZ) will lay off 10,000 employees across North America, seeking to cut costs as it deals with the economic fallout of the outbreak. The layoffs will cost the car rental company about $30 million, according to an SEC filing.

Darden Restaurants (DRI) is raising $400 million through a share sale, in order to shore up its liquidity. The parent of Olive Garden and other restaurant chains said same-restaurant sales are down about 45% so far this quarter.

Beyond Meat (BYND) products will be introduced in Starbucks (SBUX) stores in China this week. Starbucks has reopened most of its stores in China and it's hoping the new offerings will help boost customer traffic.

WATERCOOLER

The historic $2.2 trillion stimulus package Congress passed in March beefed up unemployment benefits, increasing weekly payments and expanding the pool of eligible workers. However, an avalanche of claims has overwhelmed state offices, leaving many people unable to access the money. (CNBC)