Morning Brief

What to watch today: Dow set for sharp drop as May's selloff continues

BY THE NUMBERS

Dow futures were pointing to a sharp decline at Monday's open as investors weighed some states reopening their economies against escalating tensions between the U.S. and China over the coronavirus. On Friday, a 622-point, or nearly 2.6%, decline for the Dow Jones Industrial Average wiped out last week's gains after blue chips in April saw their best month since January 1987. (CNBC)

Depressed U.S. oil prices were also adding pressure on stocks, with West Texas Intermediate crude falling early Monday. WTI, the American oil benchmark, rebounded 16.7% last week. (Reuters)

This Friday, the Labor Department's April jobs report is expected to see a jump in unemployment from 4.4% to over 16.1%, the highest level since 1939, according to Dow Jones. (CNBC)

Airline shares were sharply lower in Monday's premarket after Warren Buffett said Saturday that his Berkshire Hathaway has divested its entire equity positions in United, American, Southwest and Delta. The prior stakes were worth over $4 billion in December. (CNBC)

Buffett said the U.S. economy will withstand the pandemic as it has with all previous battles and crises. "Nothing can basically stop America," he added. "In World War II, I was convinced of this. ... I was convinced of this during the Cuban Missile Crisis, 9/11, the financial crisis." (CNBC)

The billionaire investor, known as the Oracle of Omaha, also addressed the "elephant-sized acquisition" he has yet to make. Buffett hasn't made any big investments in several years as Berkshire's massive cash pile ballooned to a record $137 billion by the end of March. He said the reason is simple: He hasn't found anything "attractive.""

Buffett has the majority of Berkshire's massive portfolio in just 5 stocks (CNBC Pro)
* Here is CNBC's full recap of Warren Buffett's newsmaking comments at Berkshire's annual meeting

Tyson Foods on Monday reported its fiscal second-quarter net income fell 15% from a year ago, as production disruptions weighed on its results. Clothing company J.Crew filed for bankruptcy Monday, marking the first major retail bankruptcy of the coronavirus pandemic. (CNBC)

IN THE NEWS TODAY

President Donald Trump said he believes a "mistake" in China was the cause of the coronavirus pandemic, though he did not present any evidence for the claim. The comments, during Sunday's Fox News virtual town hall, came hours after Secretary of State Mike Pompeo said that "a significant amount of evidence" suggested that the virus emerged from a Chinese laboratory in Wuhan. (CNBC)

Trump also said he's confident there will be a coronavirus vaccine by the end of the year. Public health officials have said a vaccine could take a year to 18 months. Vaccines often take many years to develop and distribute. The World Health Organization has said there are currently dozens of coronavirus vaccines in development. (CNBC)

Gilead Sciences' coronavirus fighting drug remdesivir will be available to doctors and patients as early as this week. The Food and Drug Administration granted emergency use authorization for remdesivir after Gilead and the government last week released positive results from two separate clinical trials. (CNBC)

New York, New Jersey, Connecticut, Pennsylvania, Delaware, Massachusetts and Rhode Island plan to coordinate the purchasing of personal protective equipment for hospitals. All seven states are also coordinating plans to reopen their economies. (CNBC)

Nearly 1.2 million Americas have been diagnosed with Covid-19 and 67,686 have died. Worldwide cases have topped 3.5 million with 247,752 deaths. The U.S. had its deadliest 24-hour period, ending on Friday at 4 a.m. ET, due to the virus, according to data published by the World Health Organization. (CNBC)

UK coronavirus deaths set to overtake Italy's with exit strategy still unknown (CNBC)
Goldman Sachs outlines 'useful lessons' from China reopening after coronavirus (CNBC)

Florida on Monday becomes the latest state to begin to reopen some businesses. Restaurants in all but three South Florida counties are allowed to resume in-dining service at 25% capacity, with outside areas limited only by social distancing guidelines. Retailers in Florida can also operate at 25% capacity indoor. (AP)

STOCKS TO WATCH

Walt Disney (DIS) – Moffett Nathanson downgraded Disney shares to neutral from buy, pointing to economic pressures stemming from the Covid-19 outbreak.

Comcast (CMCSA) – Comcast's NBCUniversal unit is weighing significant cost-cutting actions across its media and entertainment properties, according to a Wall Street Journal report. Comcast is the parent of NBCUniversal and CNBC.

Uber Technologies (UBER) will have to face a lawsuit alleging that the ride-hailing service engaged in anticompetitive practices that drove rival Sidecar Technologies out of business.

Ford (F), General Motors (GM) and Fiat Chrysler (FCAU) were under pressure after AutoData reported that U.S. auto sales plunged 48% to an annual rate of 8.6 million vehicles for April.

Hertz (HTZ) has until today to either pay $500 million dollars or obtain a waiver, according to a report in the New York Post. If it fails to do so, the report said the car rental company would likely file for bankruptcy within a matter of days.

Goldman Sachs added ConocoPhillips (COP) to its conviction buy list, saying it sees energy industry fundamentals bottoming and shares are attractively priced among other reasons.

Telsey Advisory Group upgraded Big Lots (BIG) to outperform from market perform, citing confidence in the discount retailer's strategic transformation plan as well as its solid financial position.

WATERCOOLER

When the coronavirus crisis, or at least the worst of it, passes, the U.S. economy will still be big, the biggest in the world, with any threat to be overtaken likely put at bay for many years. But in other ways, things will feel smaller, much smaller in fact. Here's what the future holds for Americans. (CNBC)