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Goldman Sachs, Janet Yellen, Tesla, Coherent, Netflix - 5 Things You Must Know Tuesday

Janet Yellen, President-elect Joe Biden's nominee for Treasury secretary, will tell lawmakers they must 'act big' to lift the U.S. economy out of recession; Goldman Sachs, Bank of America and Netflix report earnings; Tesla begins deliveries of its first Shanghai-made Model Y crossovers in China.

Here are five things you must know for Tuesday, Jan. 19:

1. -- Stock Futures Trade Higher Ahead of Yellen Testimony 

Stock futures were higher Tuesday as Janet Yellen, President-elect Joe Biden's nominee for Treasury secretary, prepared to tell Congress that lawmakers must do more to lift the U.S. economy out of the recession brought on by the coronavirus pandemic.

Contracts linked to the Dow Jones Industrial Average rose 189 points, S&P 500 futures were up 26 points and Nasdaq futures gained 116 points.

Yellen, who served as chair of the Federal Reserve from 2014 to 2018, will tell the Senate Finance Committee that Congress must "act big" on the next coronavirus relief package with borrowing costs so low.

Yellen's confirmation hearing before the Senate Finance Committee will begin at 10 a.m. ET. 

“Economists don’t always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now -and long-term scarring of the economy later,” Yellen will say Tuesday, according to her prepared remarks. “Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job.”

Biden last week unveiled a $1.9 trillion Covid-19 relief package that includes $1,400 direct stimulus payments, extended and enhanced jobless benefits, a moratorium on evictions and foreclosures through September, and funds for vaccine deployment.

2. -- Tuesday's Economic Calendar: Goldman Sachs and Netflix Earnings

Bank of America  (BAC) - Get Bank of America Corporation Report reported fourth-quarter earnings of 59 cents a share vs 74 cents a share a year earlier.

The bank said it would release around $828 million in reserves, allowing it to pay a dividend of 18 cents a share for the fourth quarter, and unveiled a $2.9 billion share buyback plan.

Goldman Sachs  (GS) - Get Goldman Sachs Group Inc. (The) Report earned $12.08 a share in the fourth quarter, smashing Wall Street expectations of $7.39.

Net revenue in the period was $11.74 billion, up 18% from a year earlier.

Earnings also will be released Tuesday from Netflix  (NFLX) - Get Netflix Inc. Report, J.B. Hunt Transport Services  (JBHT) - Get J.B. Hunt Transport Services Inc. Report, Halliburton  (HAL) - Get Halliburton Company Report, Charles Schwab  (SCHW) - Get Charles Schwab Corporation (The) Report, Interactive Brokers  (IBKR) - Get Interactive Brokers Group Inc. Report, State Street  (STT) - Get State Street Corporation Report and Comerica  (CMA) - Get Comerica Incorporated Report.

Later in the week reports will be issued by UnitedHealth  (UNH) - Get UnitedHealth Group Incorporated (DE) Report, Procter & Gamble  (PG) - Get Procter & Gamble Company (The) Report, Morgan Stanley  (MS) - Get Morgan Stanley Report, United Airlines  (UAL) - Get United Airlines Holdings Inc. Report, Intel  (INTC) - Get Intel Corporation Report and International Business Machines  (IBM) - Get International Business Machines Corporation Report.

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The economic calendar in the U.S. Tuesday is light. Jobless Claims, Housing Starts and Existing Home Sales will be released later in the week. 

3. -- Lumentum to Buy Coherent for $5.7 Billion

Lumentum Holdings  (LITE) - Get Lumentum Holdings Inc. Report agreed to acquire laser maker Coherent  (COHR) - Get Coherent Inc. Report for $5.7 billion.

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The Wall Street Journal had reported the deal could be announced this week.

Under the terms of the agreement, Coherent shareholders will receive $100 a share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own, the companies said in a statement. 

The transaction represents a premium of 49% to Coherent's closing price on Friday.

Shares of Coherent were up 35.02% at $205.17 in premarket trading on Tuesday. The stock has fallen about 10% over the past 12 months. Lumentum shares, meanwhile, were up 1.58% at $108; its stock has gained about 40% over the past year.

Coherent makes lasers used in medical and scientific equipment, industrial applications and semiconductor manufacturing. Lumentum primarily makes optical components used in cloud networking, data transmission and submarine communications. 

4. -- Tesla Begins Delivering China-Made Model Y Crossover

(TSLA) - Get Tesla Inc. Report  (TSLA) - Get Tesla Inc. Report has begun deliveries of its first Shanghai-made Model Y crossovers in China.

The electric vehicle company said via Twitter that "Model Y deliveries in China have officially begun."

Tesla broke ground at its Shanghai plant two years ago. The Model Y is the second vehicle made at the plant. 

About a year ago, Tesla started delivering the Model 3 sedan to the Chinese market. The Model 3 was the best-selling electric vehicle in China last year, with more than 138,000 sold, according to the China Passenger Car Association.

The Model Y long-range version sold in China starts at 339,900 yuan (about $52,400). 

Analysts Dan Ives of Wedbush last week raised his price target on Tesla to $950 from $751, with the stock's bull-case target boosted to $1,250, as he said "the hearts and lungs of the Tesla bull thesis is centered around China."

Tesla was rising 1.65% to $839.78 in premarket trading.

5. -- Coronavirus - The Latest

The number of confirmed global deaths from Covid-19, the disease caused by the coronavirus, rose to 2.04 million, according to Johns Hopkins University. Confirmed cases of the virus across the world have risen to 95.6 million.

The U.S. death toll is 399,003, the most in the world. The number of infected people in the U.S. was nearly 24.1 million.

According to CNN, while December was the deadliest month in the U.S. for the pandemic, January was on pace to be worse. More than 46,240 U.S. coronavirus deaths were reported in January's first 15 days, which already was more than half the roughly 77,500 recorded in all of December.

President-elect Joe Biden’s incoming administration will reject Donald Trump's move to relax coronavirus-related travel bans for non-American citizens arriving from the European Union, the U.K. and Brazil.

Trump moved to rescind the bans beginning on Jan. 26, after the Centers for Disease Control last week issued an order requiring all air travelers to present negative test results for the coronavirus or present evidence they had recovered from the disease. 

Biden's press secretary, Jen Psaki, said in addition to not lifting the curbs the incoming president plans to strengthen public health measures around international travel.