Coronavirus, Dow Futures, BP, AstraZeneca - 5 Things You Must Know Monday

Stock futures sink on worries a second wave of coronavirus infections could hold back the U.S. recovery; BP to take charges of up to $17.5 billion as demand slumps during the pandemic; 24 Hour Fitness files for bankruptcy.
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Here are five things you must know for Monday, June 15:

1. -- Stock Futures Sink on Virus Fears

Stock futures were sinking Monday on concerns a second wave of coronavirus infections could hold back recoveries in the U.S. and world economies.

Contracts linked to the Dow Jones Industrial Average fell 629 points, futures for the S&P 500 declined 62 points and Nasdaq futures sank 149 points.

States like Arizona, Florida, North Carolina and Texas have reported a sharp rise in new coronavirus infections and an increase in hospitalizations.

“States like Texas, Florida, Georgia, North Carolina, South Carolina, where you see those outbreaks right now, never really reduced the number of cases substantially,” Scott Gottlieb, former chief of the Food and Drug Administration, said on CBS’s “Face the Nation.” “They had spread. It was persistent. And now it’s flaring up.”

China reported an outbreak of new infections in Beijing, pushing the city to reintroduce strict lockdown measures and ramp up coronavirus testing.

“Once again, the pandemic has triggered cause for fear and doubt about the road ahead,” said Hayaki Narita at Mizuho Bank.

Stocks closed higher Friday but the S&P 500 fell 4.8% in its worst week in nearly three months on worries the economy could take longer to recover if the U.S. sees a resurgence in coronavirus infections. The Dow closed the week with a 5.6% loss, and the Nasdaq declined 2.3%.

2. -- This Week's Economic Calendar 

The economic calendar Monday includes the Empire State Manufacturing Index for June at 8:30 a.m. ET.

Retail Sales data will be released Tuesday, with economists forecasting a rebound to 7.5% from contractions of 8.7% in March and 16.4% in April. Excluding autos and gas, Retail Sales are expected to rise 5.2%.

Federal Reserve Chairman Jerome Powell will testify - virtually - before before the Senate Banking Committee and House Financial Services Committee on Tuesday and Wednesday, respectively.

The earnings calendar is light Monday but reports are expected later in the week from Oracle  (ORCL) - Get Report, Kroger  (KR) - Get Report, Carnival  (CCL) - Get Report, Lennar  (LEN) - Get Report, Groupon  (GRPN) - Get Report, Designer Brands  (DBI) - Get Report, Jabil  (JBL) - Get Report and CarMax  (KMX) - Get Report.

3. -- BP to Take Charges of $17.5 Billion as Demand Slumps

BP  (BP) - Get Report will record charges and write-offs of as much as $17.5 billion in the second quarter, with the energy giant saying it expects the coronavirus pandemic to lead to weaker demand and lower energy prices for a prolonged period.

The company also said the pandemic was accelerating its plans to transition to a "lower carbon company" and move away from its reliance on fossil fuels.

“In February we set out to become a net zero company by 2050 or sooner,” said BP CEO Bernard Looney. “Since then we have been in action, developing our strategy to become a more diversified, resilient and lower carbon company.”

“All that will result in a significant charge in our upcoming results, but I am confident that these difficult decisions - rooted in our net zero ambition and reaffirmed by the pandemic - will better enable us to compete through the energy transition,” he added.

American depositary receipts of BP were falling 4.65% to $23.60 in premarket trading Monday.

4. -- AstraZeneca to Supply Europe With 400 Million Doses of Covid-19 Vaccine

AstraZeneca  (AZN) - Get Report could supply European nations with as many as 400 million doses of a Covid-19 vaccine under a deal reached this weekend with Europe’s Inclusive Vaccines Alliance - if the vaccine under consideration proves safe and effective.

The rollout of the vaccine could begin as soon as the end of this year and would use one now under trial by the University of Oxford, which is one several under investigation globally. 

Headed by Germany, France, Italy and the Netherlands, the alliance is looking to speed the supply of the vaccine and "make it available to other European countries that wish to participate in the initiative," according to a statement from AstraZeneca CEO Pascal Soriot.

“This will ensure that hundreds of millions of people in Europe will have access to this vaccine, of course if it works and we will know that by the end of summer,” Soriot said. He told reporters he has “good hope” the vaccine will work, Reuters reported.

5. -- 24 Hour Fitness Files for Bankruptcy

24 Hour Fitness Worldwide filed for bankruptcy as the fitness chain was unable to keep up with debt payments as the coronavirus outbreak led to a rise in membership cancelations and gym closures.

The chain had to close all its gyms in the middle of March as it adhered to strict lockdown measures meant to contain the spread of the virus. The company fully drew its $120 million credit line to cope with the expected impact of the pandemic, according to Bloomberg.

24 Hour Fitness, Bloomberg said, had $1.3 billion in debt since its leveraged buyout in 2014.