Oil Prices, Earnings Season, Meat Shortage, Coronavirus - 5 Things You Must Know Monday

Stock futures point lower; the world's major oil producers reach an historic pact to cut production; investors remain focused on the coronavirus and look to its effect on corporate earnings.
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Here are five things you must know for Monday, April 13:

1. -- Stock Futures Lower to Start Week

Stock futures pointed to a lower start for Wall Street Monday as investors digested an historic agreement to cut oil production while keeping their focus squarely on the coronavirus and its impact on the global economy and corporate earnings.

Contracts linked to the Dow Jones Industrial Average fell 128 points, futures for the S&P 500 declined 14 points and Nasdaq futures were down 32 points. 

Asian shares traded lower while most European markets were closed for Easter Monday.

Earnings season begins this week with reports rolling in from big U.S. banks and financial firms. The numbers, however, will be released during a period of uncertainty and low visibility resulting from the pandemic.

U.S. stocks are coming off their biggest week of gains since 1974 after the Federal Reserve announced a plan to pump more than $2.3 trillion into the economy.

The S&P 500 jumped 12% for the holiday-shortened week despite 6.6 million people filing for unemployment benefits as companies curtailed operations, restaurants closed and hotels welcomed very few guests during the coronavirus pandemic. 

The Dow climbed 13% for the week and the Nasdaq posted a weekly gain of 11%.

2. -- Oil Prices Slip on OPEC+ Agreement

Oil prices slipped Monday after OPEC leaders, as well as non-member allies, finally reached a conclusive agreement that will cut production by around 10 million barrels a day.

The deal, which begins on May 1 and lasts for two years, could see supplies cut by as much as 20 million barrels per day - or a fifth of world output - if G-20 member states agree to participate in the historic deal, which was reached after four days of negotiations by video conference.

OPEC member states, as well as Russia, will cut their collective production by 9.7 million barrels a day, with the U.S., Canada and Brazil contributing 3.7 million barrels a day. Other G-20 states will reduce their output - largely because of a slump in demand triggered by the coronavirus pandemic - by 1.3 million barrels.

The deal almost fell apart because of resistance from Mexico, which agreed to cut just 100,000 barrels a day of output, far less than wanted by Saudi Arabia. The U.S. ended the stall in negotiations by pledging to compensate for the Mexican amount with 300,000 barrels of reductions of its own, according to The Wall Street Journal.

West Texas Intermediate crude futures for May delivery, which are tightly connected to U.S. gas prices, fell 0.83% to $22.57.

3. -- Coronavirus - The Latest

The number of confirmed global cases of the coronavirus has risen to 1,851,531, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths increased to 114,290.

The U.S. has 557,590 cases of the coronavirus, the most in the world, according to Johns Hopkins CSSE. Deaths in the U.S. have risen to 22,109, also the most in the world.

New York state had 758 deaths overnight into Sunday, down from 783 the day before and the third straight day of declines, said Gov. Andrew Cuomo. The total number of deaths in the state approached 9,400 and was exceeded only by the death tolls in Italy, Spain, France and the U.K.

Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday on CBS’s “Face the Nation" that without an effective therapy or a vaccine the U.S. could expect 18 months of rolling shutdowns.

“We could have these waves of flareups, controls, flareups and controls until we actually get a therapy or a vaccine,” he said. “We need to find ways of getting the people who are healthy, who are at lower risk back to work and then providing the assistance to those who are most at risk, who are going to need to be quarantined or isolated for the foreseeable future.” 

“This could be a long hard road that we have ahead of us until we get either to an effective therapy or a vaccine,” he added. “It’s hard for me to see a V-shaped recovery under that scenario.”

4. -- Smithfield Foods Closes Pork Plant Due to Coronavirus

Smithfield Foods said Sunday it would be closing its pork processing plant in Sioux Falls, South Dakota until further notice after hundreds of employees tested positive for the coronavirus.

The plant employs about 3,700 people. Health officials said Sunday that 293 of the 730 people in South Dakota who have been diagnosed with Covid-19, the disease caused by the coronavirus, work at the plant, the Associated Press reported.

Smithfield Foods, the world’s biggest pork processor, last week said it was closing the pork processing plant for three days for cleaning and sanitizing but on Sunday said it would shut the plant down indefinitely.

“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply,” said Smithfield Foods President and CEO. “It is impossible to keep our grocery stores stocked if our plants are not running. These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers.”

5. -- This Week's Calendar Highlights

The economic calendar in the U.S. on Monday is bare. The big report this week will be the release Wednesday of Retail Sales, which are expected to tumble as much as 7% as the coronavirus strikes all corners of the U.S. economy. Grocery stores, however, likely benefited as people raced to fill their cupboards.

There are no major earnings reports scheduled for Monday but reports will come later in the week from JPMorgan Chase  (JPM) - Get Report, Wells Fargo  (WFC) - Get Report, Johnson & Johnson  (JNJ) - Get Report, Bank of America  (BAC) - Get Report, Citigroup  (C) - Get Report, Goldman Sachs  (GS) - Get Report, UnitedHealth  (UNH) - Get Report, Abbott Laboratories  (ABT) - Get Report, BlackRock  (BLK) - Get Report, and Schlumberger  (SLB) - Get Report.