Here are five things you must know for Friday, March 6:
1. -- Stock Futures Slump, 10-Year Note Yields Hit All-Time Lows
Stock futures fell sharply Friday and benchmark 10-year note yields hit all-time lows as fears of a global coronavirus pandemic and its potential economic fallout continued to grip world markets.
With coronavirus cases across the globe approaching 100,000, government officials, health experts and business leaders have recommended travel restrictions, factory closures and stay-at-home prevention techniques to limit the spread of the virus.
The rising number of cases in western Europe and the United States over the past week has hammered risk assets around the world, driving investors into safe-haven assets such as U.S. Treasury bonds, gold and the Japanese yen.
The yield on the 10-year note touched an all-time intraday low of 0.767%, only three days after falling below 1% for the first time ever after the Federal Reserve's emergency rate cut.
U.S. stock futures trended lower Friday following a decline of 969 points for the Dow Jones Industrial Average in the previous session and ahead of the release of the U.S. jobs report for February, which probably won't show much of an impact from the virus outbreak.
Contracts tied to the Dow Jones Industrial Average declined 533 points, S&P 500 futures were down 68 points and Nasdaq futures slumped 236.25 points.
2. -- Jobs Report 'Not a Coronavirus Story'
The economic calendar in the U.S. Friday includes the nonfarm payrolls report for February at 8:30 a.m. ET. Economists surveyed by FactSet expect the U.S. to have added 174,000 jobs last month vs. a 225,000 increase in January.
The unemployment rate is expected to hold steady at 3.6% in February. Average hourly earnings are forecast to increase 0.3% in February vs. 0.2% in January, with the year-over-year increase in February slipping to 3% from 3.1%.
Ian Shepherdson of Pantheon Economics expects jobs gains of 140,000 in February, lower than economists' forecasts. But whatever the number, Shepherdson said, the "report is old news."
“It is not a coronavirus story. That likely will come in March, when we expect to see the beginning of a serious downshift in job growth,” Shepherdson said.
The calendar for Friday also includes International Trade for January at 8:30 a.m.
3. -- JPMorgan CEO Dimon Recovering After Emergency Heart Surgery
Dimon, 63 years old, suffered an “acute aortic dissection,” JPMorgan said in a statement to employees. Dimon was alert and "recovering well," the bank said.
Dimon checked himself into a Manhattan hospital early Thursday after experiencing chest pains while getting ready for work, The Wall Street Journal reported, citing a person familiar with the matter.
JPMorgan Co-Presidents Daniel Pinto and Gordon Smith will lead the bank while Dimon recuperates. Pinto runs JPMorgan’s investment bank, and Smith is chief of its consumer bank.
Dimon has led JPMorgan, the largest U.S. bank by assets, since 2004. He led the bank through the 2008 financial crisis and is the longest-serving CEO of a U.S. megabank.
4. -- Costco Sales Get a Lift From the Coronavirus
Costco (COST) - Get Report, the membership-based warehouse retailer, reported second-quarter profit and sales that topped analysts' estimates as February benefited from an increase in customers because of concerns about the coronavirus.
“February sales benefited from an uptick in consumer demand in the fourth week of the reporting period,” Costco said in a press release. “We attribute this to concerns over the coronavirus.”
The company estimated that comparable-store sales in February got a virus-related boost of 3 percentage points.
Same-store sales in Costco's fiscal second quarter rose 8.9%, reflecting increases of 9.1% in the U.S., 8.9% in Canada and 7.9% internationally. Analysts were expecting total growth of 6.8%.
Costco was falling 1.49% in premarket trading to $311.05. The stock dropped 13% last week but has recovered most of those losses this week after Oppenheimer published a note saying that the big-box retailer would benefit from increased traffic as consumers, concerned about the coronavirus outbreak, buy supplies.
"Pullbacks in this high-quality wholesale - especially on forced S&P 500 selling/broader market weakness - are long-term buying opportunities," said Jim Cramer and the Action Alerts PLUS team, which holds Costco in its portfolio.
5. -- Starbucks Sees China Business Recovering
Starbucks SBUX said Thursday it expects fiscal second-quarter earnings to take a hit from store closings in China due to the coronavirus but said it was seeing signs of recovery.
The coffee giant said earnings would be trimmed 15 cents to 18 cents a share in the quarter.
The company said in filing with the Securities and Exchange Commission that comparable-store sales in China were down 78% during February. It said it sees a “Covid-19-related headwind of approximately $400 million to $430 million."
But, "in short, we see encouraging signs of recovery in China, our U.S. business momentum continues, and we are prepared to respond to implications of Covid-19 in every market around the world,” Starbucks CEO Kevin Johnson said in the filing.