Coronavirus, Netflix, IBM, Boeing, Best Buy - 5 Things You Must Know Tuesday

Stock futures slump as investors worry about the economic impact of a deadly respiratory virus in China; Netflix and IBM report earnings; Boeing reportedly is talking with banks to secure $10 billion in loans; Best Buy's board is examining the CEO's personal conduct.
Author:
Updated:
Original:

Here are five things you must know for Tuesday, Jan. 21:

1. -- Stock Futures Slump Amid Coronavirus Worries

Stock futures slumped Tuesday and global stocks fell as investors worried about the economic impact of a deadly respiratory virus in China.

Coronavirus, which afflicts patients with pneumonia-like symptoms that are difficult to detect through traditional medical screening, has killed at least six people and infected more than 200 others. Most of the illnesses and all of the fatalities were in the Chinese city of Wuhan. But cases also were reported in Japan, South Korea and Thailand.

With China's Lunar New Year celebrations set to kick off on Friday, World Health Organization officials are concerned the virus could spread even more quickly in China, the world's most populated country. Investors, meanwhile, are worried a SARS-like outbreak could further dampen investment prospects in emerging markets around the region.

The International Monetary Fund, in fact, cited emerging market weakness as the key driver in its decision to trim global economic growth forecasts for 2020 and 2021, even as it anticipated near-term gains for trade following last week's phase-one agreement between the U.S. and China.

Contracts linked to the Dow Jones Industrial Average declined 81 points, futures for the S&P 500 were down 13.15 points and Nasdaq futures tumbled 47.25 points.

Stocks finished at record highs Friday and Wall Street closed out a strong week amid solid earnings and the signing of the preliminary trade deal between the U.S. and China. Stock markets were closed Monday in the U.S. for Martin Luther King Jr. Day.

2. -- Netflix and IBM Report Earnings Tuesday

Earnings reports are expected Tuesday from Netflix  (NFLX) - Get Report, International Business Machines  (IBM) - Get Report, United Airlines  (UAL) - Get Report, TD Ameritrade  (AMTD) - Get Report, Interactive Brokers Group  (IBKR) - Get Report, Las Vegas Sands  (LVS) - Get Report, Comerica  (CMA) - Get Report and Capital One Financial  (COF) - Get Report.

Halliburton  (HAL) - Get Report posted fourth-quarter adjusted earnings of 32 cents a share, 3 cents above analysts' estimates.

The economic calendar in the U.S. Tuesday is empty.

3. -- Boeing Reportedly Talking With Banks to Secure $10 Billion in Loans

Boeing  (BA) - Get Report is in discussions with several banks to secure about $10 billion or more in loans to offset costs stemming from a production halt of its grounded 737 MAX jetliners following two fatal crashes.

Citing people familiar with the discussions, CNBC reported that Boeing has so far secured at least $6 billion from a group of banks and was talking to other lenders about more.

CNBC said the loan Boeing currently is negotiating likely will be a delayed-draw loan, meaning Boeing can tap into it later, a move that may not immediately affect its credit rating.

Bloomberg, meanwhile, reported Boeing was close to agreeing a two-year credit facility with a group of banks led by Citigroup.

Both Moody’s and Standard & Poor's in December downgraded Boeing’s credit rating, with Moody's going a step further last week saying its current "A3" rating was on review due to the extended issues with the 737 MAX.

Boeing shares fell 0.82% to $321.50 in premarket trading Tuesday.

4. -- Best Buy Examining CEO's Personal Conduct

Best Buy  (BBY) - Get Report has been investigating allegations that CEO Corie Barry had an inappropriate romantic relationship with a fellow executive, who has since left the company, according to reports.

The allegations were sent to Best Buy's board in an anonymous letter dated Dec. 7, according to The Wall Street Journal. The letter claims Barry had a romantic relationship for years with former Best Buy Senior Vice President Karl Sanft before she took over as CEO last June. 

The Journal reviewed a copy of the letter last week.

Best Buy takes allegations of misconduct very seriously," a spokesman told
the Journal. 

Best Buy, the electronics retailer, said its board has hired a law firm to conduct an ongoing independent review and said it wouldn't comment "further until the review is concluded."

5. -- World Economic Forum's Focus Is Climate Change

The annual World Economic Forum has kicked off in Davos, Switzerland, and environmental issues are front and center.

The World Economic Forum, citing a survey of more than 750 key decision-makers, said catastrophic trends like global warming and the extinction of animal species would be a leading discussion at the gathering, the Associated Press reported.

“There is mounting pressure on companies from investors, regulators, customers, and employees to demonstrate their resilience to rising climate volatility," John Drzik, chairman of Marsh & McLennan Insights, told the AP. Marsh & McLennan and Zurich Insurance Group helped the World Economic Forum compile the report.

BlackRock  (BLK) - Get Report CEO Larry Fink said last week that his massive money management company would put climate change and sustainability at the heart of its investing approach.

President Donald Trump extolled the economic achievements of his administration in a keynote address at the World Economic Forum, just hours ahead of an impeachment trial in the Senate that threatens to tarnish the legacy of his first term in office.

Trump boasted that the current U.S. economic boom, now in its 11th year, was the "greatest the world has even seen," thanks in part to his efforts to address the "predatory practices of China" that he was able to thwart with aggressive trade reform. He also repeated his criticism of the Federal Reserve and Chairman Jerome Powell, whom he once again accused of "raising rates too fast, and lowering them too slowly."

"Today I'm proud to declare the United States is in the midst of an economic boom, the likes of which the world has never seen before," Trump told a selected audience of political and business leaders at the 50th annual meeting of the World Economic Forum in Davos. "America is thriving. America is flourishing and yes, America is winning again like never before."