Here are five things you must know for Thursday, Feb. 20:
1. — Stock Futures Slip on Coronavirus Concerns
Stock futures were down modestly Thursday, a day after the S&P 500 and Nasdaq set closing record highs, while shares in Shanghai rose 1.84% after China’s central bank cut interest rates to help boost its economy as it struggles amid the coronavirus outbreak.
Contracts tied to the Dow Jones Industrial Average fell 52 points, S&P 500 futures slipped 5.95 points and Nasdaq futures were down 17.50 points.
Investors were continuing to monitor the outbreak’s impact on global growth and corporate profits.
Goldman Sachs warned clients about a possible correction in equities as investors underestimate how much of an impact the virus may have on the stock market.
“We believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high,” Goldman strategist Peter Oppenheimer wrote in a note.
A.P. Moeller-Maersk, the Danish shipping giant, was the latest company to issue a warning related to the virus, saying Thursday that the outbreak gave it limited visibility into the rest of 2020.
South Korea reported Thursday its first death from the coronavirus, while global deaths from the virus have risen to 2,129 and confirmed cases have increased to 75,727, according to Johns Hopkins CCSE.
2. — ViacomCBS, Fitbit and Domino’s Pizza Report Earnings
Earnings reports are expected Thursday from ViacomCBS (VIACA) – Get Report, Fitbit (FIT) – Get Report, First Solar (FSLR) – Get Report, Norwegian Cruise Line (NCLH) – Get Report, Texas Roadhouse (TXRH) – Get Report, Domino’s Pizza (DPZ) – Get Report, Zscaler (ZS) – Get Report, Dropbox (DBX) – Get Report, Six Flags Entertainment (SIX) – Get Report and Hormel Foods (HRL) – Get Report.
The economic calendar in the U.S. Thursday includes weekly Jobless Claims at 8:30 a.m. ET, the Philadelphia Fed Business Outlook Survey for February at 8:30 a.m. and Oil Inventories for the week ended Feb. 14 at 11 a.m.
3. — Bloomberg Takes Heat From Democratic Rivals at Debate
Michael Bloomberg drew fire from his opponents in a Democratic Party presidential debate, the former New York City mayor’s first since launching his self-funded campaign fueled by hundreds of millions of dollars in advertising purchases.
Vermont Sen. Bernie Sanders, the current front-runner for the Democratic nomination, criticized Bloomberg for his “stop-and-frisk” policing policy while he was mayor of New York, and Sen. Elizabeth Warren, D-Mass., said Americans don’t need to substitute “one arrogant billionaire for another.”
Bloomberg, for his part, said that if Sanders was the party’s nominee, “We will have Donald Trump for another four years and we can’t stand that.”
Bloomberg has spent several hundred million dollars of his own fortune since jumping into the campaign late in November. He has seen his national poll numbers rise as he has sought to overwhelm the airwaves – and his opponents – with the message that he is the most experienced and best funded candidate to defeat President Trump in November.
Sanders has been extending his lead in national polls since winning the New Hampshire primary earlier this month.
Even before Wednesday’s debate began, Sanders and other rivals were taking aim at Bloomberg. In addition to Bloomberg’s support of the “stop-and-frisk” policy that largey targeted minority men, Bloomberg’s rivals pointed to his sexist remarks while running his eponymous media business.
During the debate, Bloomberg appeared to be rocked back on his heels by questions about sexual harassment, and non-disclosure agreements between him and women at his media company.
4. — Victoria’s Secret Is Going Private
L Brands (LB) – Get Report is close to reaching an agreement to sell Victoria’s Secret to a private-equity firm in a deal that would value the lingerie brand at about $1.1 billion, The Wall Street Journal reported, citing people familiar with the matter.
Sycamore Partners is expected to purchase 55% of Victoria’s Secret and take the company private. L Brands is expected to keep a 45% stake in the company.
Leslie Wexner, who has run the retail company for more than 50 years, will step down as CEO and chairman, but will remain on the L Brands board and retain stakes in the companies. Wexner owns about 17% of L Brands shares.
A deal could be announced as soon as Thursday, the Journal reported.
A sale of Victoria’s Secret would leave L Brands with the much better-performing Bath & Body Works as its flagship brand. Sales at Bath & Body Works have risen steadily, so that it now accounts for half of L Brands’ revenue, up from 15% previously, according to analysts at Jefferies.
5. — Zillow Surges After Revenue More Than Doubles
Zillow reported a fourth-quarter loss of 49 cents a share vs. 48 cents a year earlier, while revenue jumped to $943.9 million from $365.3 million. Analysts had been expecting revenue of $814.6 million.
Zillow’s primary business remains selling leads to real estate agents but it has been shifting more into buying and selling homes. Zillow Offers posted revenue of $603 million in the quarter after buying 1,787 homes and selling 1,902.
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