Here are five things you must know for Monday, May 11:
1. -- Stock Futures Point to a Lower Start for Wall Street
Stock futures declined Monday as investors anticipated a recovery in the global economy as lockdown restrictions are eased but assessed a surge in U.S. unemployment.
Contracts linked to the Dow Jones Industrial Average fell 163 points, futures for the S&P 500 declined 20 points and Nasdaq futures were down 30 points.
Stocks in the U.S. rose solidly Friday even after the Labor Department reported American employers cut a record 20.5 million jobs in April and the unemployment rate spiked to 14.7%.
The S&P 500 rose 1.7% for its fourth gain in five days, the Dow rose 1.9% to 24,331, and the Nasdaq added 1.6%.
The historic job losses are a reason President Donald Trump has been trying to convince Americans it’s safe to return to work even while the coronavirus has infected some officials in the West Wing.
Treasury Secretary Steven Mnuchin said the American public could experience "permanent economic damage" if the U.S. economy doesn't reopen.
“If we do this carefully, working with the governors, I don’t think there’s a considerable risk,” Mnuchin said on “Fox News Sunday.” “Matter of fact, I think there’s a considerable risk of not reopening. You’re talking about what would be permanent economic damage to the American public.”
Mnuchin also said the unemployment numbers “are probably going to get worse before they get better,” but he expected improvement in the second half of 2020 and added that 2021 would be a “great year.”
2. -- Under Armour, Mylan and Tilray Report Earnings
Under Armour (UAA) - Get Report reported a first-quarter adjusted loss of 34 cents a share, wider than analysts' calls for a loss of 17 cents. Revenue was $930.2 million vs. expectations of $973.2 million.
Earnings reports are also expected Monday from Mylan (MYL) - Get Report, Marriott International (MAR) - Get Report, Choice Hotels (CHH) - Get Report, AutoNation (AN) - Get Report, Cardinal Health (CAH) - Get Report, Tilray (TLRY) - Get Report, Tencent Music (TME) - Get Report, Inovio Pharmaceuticals (INO) - Get Report, Ethan Allen (ETH) - Get Report, Eventbrite (EB) - Get Report, Caesars Entertainment (CZR) - Get Report and Datadog (DDOG) - Get Report.
The economic calendar Monday is empty but reports are expected this week on consumer prices, jobless claims and retail sales.
3. -- Tesla Sues Alameda County, Threatens to Leave California
Tesla (TSLA) - Get Report CEO Elon Musk said over the weekend the "final straw" had been broken and that he's suing Alameda County, California, which didn't allow the electric carmaker to resume operations at its Fremont plant on Friday.
Musk also said Tesla would pick up and drive its operations out of California.
"Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be (dependent) on how Tesla is treated in the future. Tesla is the last carmaker left in CA," said Musk, in a series of tweets. adding that health officials were "acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!"
The CEO believes Tesla should have been allowed to reopen amid the shutdowns and lockdowns over Covid-19, but last week Tesla's locations in Alameda were forced to stay closed as part of an attempt to slow the spread of the coronavirus.
Meanwhile, sales of Tesla's Model 3 sedan in China fell more than 64% in April from March, according to the China Passenger Car Association.
Tesla sold 3,635 Model 3 cars in April vs. 10,160 in March.
4. -- Intel and TSMC Seeking to Build U.S. Chip Factories
Trump administration officials are in talks with Intel (INTC) - Get Report and Taiwan Semiconductor Manufacturing (TSM) - Get Report to build factories in the U.S., according to a report from The Wall Street Journal.
The Trump administration has been looking to develop new chip factories in the U.S. as concern grows about reliance on Asia for critical technology. In fact, officials say they are particularly concerned about reliance on Taiwan, home of TSMC, the world’s largest contract chip manufacturer.
“We’re very serious about this,” said Greg Slater, Intel’s vice president of policy and technical affairs. Slater told the Journal that Intel’s plan would be to operate a plant that could provide advanced chips securely for both the government and other customers.
TSMC has been talking to officials at the Commerce and Defense departments as well as to (AAPL) - Get Report, one of its largest customers, about building a chip factory in the U.S., the Journal reported, citing people familiar with the conversations.
5. -- Stage Stores Files for Bankruptcy
The retailer said it would seek buyers for all or parts of its business and begin liquidating its inventory as it reopens stores that were closed due to the coronavirus pandemic.
Stage said it would reopen 557 of its stores on May 15 and begin selling off inventory.
Like many retailers, Stage has been hurt in recent years by consumers’ shift to online shopping. The coronavirus pandemic also has decimated brick-and-mortar stores, closing many of them and keeping would-be shoppers at home.