Here are five things you must know for Wednesday, Jan. 20:
1. -- Stock Futures Rise Ahead of Joe Biden's Inauguration
Stock futures rose modestly Wednesday as investors anticipate that an administration under Joe Biden, who will be sworn in Wednesday as the 46th president of the United States, will increase spending to boost economic growth.
Biden will be sworn in at 12 p.m. ET in Washington.
Stocks closed higher Tuesday as Biden’s nominee for Treasury secretary, former Federal Reserve Chair Janet Yellen, told Congress that lawmakers must do more to lift the U.S. economy out of the recession brought on by the coronavirus pandemic.
Yellen, who could be confirmed as soon as Thursday, said she'd focus on America’s workers as treasury secretary, adding that providing assistance for the unemployed and small businesses would provide the “biggest bang for the buck.”
“If most of this is implemented, it does suggest significant pickup in economic growth as we head through to the fourth quarter of this year,” said David Kelly, chief global strategist at JPMorgan Funds.
Yellen, who served as chair of the Federal Reserve from 2014-2018, did encounter Republican resistance, however, to Biden’s $1.9 trillion Covid-19 relief plan at her confirmation hearing.
“Now is not the time to enact a laundry list of liberal structural economic reforms,” said Republican Sen Chuck Grassley of Iowa.
2. -- Netflix Surges as Subscribers Surpass 200 Million
Netflix was rising more than 13% in premarket trading Wednesday after the streaming service added more paid subscribers than expected in the fourth quarter and surpassed 200 million streaming subscribers for the first time at the end of 2020.
The company also said free cash flow in 2021 would be "around break even."
"Combined with our $8.2 billion cash balance and our $750 million undrawn credit facility, we believe we no longer have a need to raise external financing for our day-to-day operations," the company said.
The stock jumped 13.41% to $569.05.
Netflix, the No. 1 streaming service, added 8.51 million paid net subscribers in the fourth quarter, beating its own forecast and the Wall Street estimate of 6.19 million.
Earnings in the period were $1.19 a share on revenue of $6.64 billion, an increase of 21.5% from a year earlier. Analysts were expecting earnings of $1.39 a share on revenue of $6.63 billon.
"We’re enormously grateful that in these uniquely challenging times we’ve been able to provide our members around the world with a source of escape, connection and joy while continuing to build our business," the company said in its earnings release.
For the first quarter, Netflix expects earnings of $2.97 a share on revenue of $7.13. Wall Street predicts earnings of $2.10 a share on revenue of $7.02 billion.
The company issued a conservative forecast for new subscriber growth in the first quarter, saying it expects to add 6 million subscribers, below analysts' forecasts of 7.45 million.
3. -- Wednesday's Calendar: UnitedHealth, P&G and Morgan Stanley Earnings
Earnings are also expected Wednesday from United Airlines (UAL) - Get Report, Bank of New York Mellon (BK) - Get Report, U.S. Bancorp (USB) - Get Report, Discover Financial Services (DFS) - Get Report and Kinder Morgan (KMI) - Get Report.
The U.S. economic calendar on Wednesday includes MBA Mortgage Applications for the week ended Jan. 15 at 7 a.m. ET and the National Association of Home Builders' Housing Market Index for January at 10 a.m.
4. -- Alibaba Jumps as Founder Jack Ma Resurfaces
Alibaba (BABA) - Get Report traded higher in premarket trading Wednesday after Jack Ma, the Chinese e-commerce giant's billionaire co-founder, resurfaced for the first time after allegedly falling out of favor with China's leadership.
Ma delivered a video speech Wednesday to more than 100 rural Chinese teachers, marking his first public appearance in nearly three months.
According to a report by the Tianmu News, a news service run by the official Zhejiang Daily Group, Ma said in the video remarks that he has been "learning and thinking" and he concluded that Chinese entrepreneurs must serve the country's visions of "rural revitalization and common prosperity."
Ma had drawn the ire of President Xi Jinping with a speech in October that attacked the government's role in blunting creativity and innovation in the tech sector. Since then, government officials have launched an antitrust investigation in Alibaba and squashed the public listing plans of its online banking subsidiary, Ant Group.
American depositary receipts of Alibaba jumped 6.86% to $268.91 in premarket trading Wednesday.
5. -- Coronavirus - The Latest
More than 400,000 Americans have died from Covid-19, the disease caused by the coronavirus. The grim milestone was reached on Tuesday, according to Johns Hopkins University, and came on the last day of Donald Trump's presidency.
Critics have said the Trump administration mismanaged the pandemic response, denying the seriousness of the pandemic, failing to coordinate policy among states, discouraging the use of masks, and promoting unproven treatments.
Incoming president Joe Biden said he will work to speed up vaccine distribution, pledging to deliver 100 million doses in his first 100 days.
The latest data from the university put U.S. deaths at 401,763 and confirmed cases of the virus in the country at more than 2.05 million.