Oil Prices Dive, IBM Reports Earnings, Shake Shack to Return $10M PPP Loan - 5 Things You Must Know Monday

Stock futures decline after oil prices slump to their lowest level in 21 years as demand for crude plunges; IBM and Halliburton report earnings; Shake Shack to return a $10 million paycheck protection loan.
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Here are five things you must know for Monday, April 20:

1. -- Stock Futures Slide as Oil Prices Fall to 21-Year Lows

Stock futures declined Monday after oil prices slumped to their lowest level in 21 years as demand for crude has dried up during the coronavirus pandemic.

Contracts linked to the Dow Jones Industrial Average fell 387 points, futures for the S&P 500 were down 43 points and Nasdaq futures tumbled 82 points.

U.S. crude futures for May delivery, the near-term contract, were sinking to their lowest level in two decades, falling 28% to $13.10 a barrel.

“Basically, bears are out for blood,” said Naeem Aslam of Avatrade. “The steep fall in the price is because of the lack of sufficient demand and lack of storage place given the fact that the production cut has failed to address the supply glut.”

OPEC+ and other producers cut production by 9.7 million barrels a day earlier in April, but the cuts weren't seen as enough to counter the demand drop. Concerns around storage also were leading crude prices lower. There is concern the storage hub at Cushing, Oklahoma, will fill to capacity, according to Bloomberg

The S&P 500 rallied Friday and finished higher for the second straight week, the first back-to-back weekly gains since the market selloff began in mid-February.

Meanwhile, the Associated Press reported the Trump administration and Congress expect an agreement to be reached Monday on an aid package of up to $450 billion to boost a small-business loan program that has run out of money and add funds for hospitals and Covid-19 testing.

2. -- IBM and Halliburton Report Earnings

Earnings reports are expected Monday from International Business Machines  (IBM) - Get Report an, Halliburton  (HAL) - Get Report.

Reports are expected later in the week from Coca-Cola  (KO) - Get Report, Texas Instruments  (TXN) - Get Report, Netflix  (NFLX) - Get Report, Delta Air Lines  (DAL) - Get Report, Visa  (V) - Get Report, Amazon.com  (AMZN) - Get Report, Eli Lilly  (LLY) - Get Report, Intel  (INTC) - Get Report, United Airlines  (UAL) - Get Report, Verizon  (VZ) - Get Report, American Airlines  (AAL) - Get Report and American Express AXP.

3. -- Coronavirus - The Latest

The number of confirmed global cases of the coronavirus has risen to 2,406,745, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths increased to 165,273.

The U.S. has 759,766 cases of the coronavirus, the most in the world, according to Johns Hopkins CSSE. Deaths in the U.S. have risen to 40,683, also the most in the world.

U.S. coronavirus cases increased by 5.6% from Saturday to Sunday, according to data collected by Johns Hopkins and Bloomberg. That’s higher than the average daily increase of 4.8% over the past week.

New York Gov. Andrew Cuomo said New York appeared to be “on the other side” of the coronavirus outbreak, after the state reported 507 new deaths, the lowest daily toll since April 6.

“If this trend holds, we are past the high point,” Cuomo said Sunday. “Whether or not the descent continues depends on what we do. But right now we are on a descent.”

New York also saw hospitalizations drop dramatically to 1,384 on Sunday from just more than 1,915 on Saturday.

Los Angeles Mayor Eric Garcetti said unemployment in the city has risen beyond the 13% jobless rate during the 2008-2009 financial crisis. Almost 300,000 residents are unemployed, Garcetti said, adding he expects that number to keep rising.

A survey by Loyola Marymount University said half of the city’s residents have lost their jobs or have had their hours reduced as a result of the crisis, Bloomberg noted.

4. -- Shake Shack to Return $10 Million Paycheck Protection Loan

Shake Shack  (SHAK) - Get Report said it would return a small business loan it received from the U.S. government to help it through the coronavirus pandemic after it received extra funding late last week.

Shake Shack announced last week it would furlough or lay off 1,000 employees and CEO Randy Garutti and founder Danny Meyer said in a statement seen Monday the company needed the assistance.

But the company was able to get extra funding late last week through an “equity transaction” and decided to “immediately return” the $10 million paycheck protection loan it obtained through the CARES Act, the Associated Press reported.

“We’re fortunate to now have access to capital that others do not. Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours,” the statement said.

5. -- Neiman Marcus Reportedly Preparing to File for Bankruptcy

Neiman Marcus is preparing to seek bankruptcy protection as soon as this week, Reuters reported, after the debt-laden department store operator was forced by the coronavirus pandemic to temporarily shut all 43 of its Neiman Marcus locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York.

The bankruptcy filing could come within days, sources told Reuters. Neiman Marcus skipped millions of dollars in debt payments last week, including one that only gave the company a few days to avoid a default.