Volatility has been high, and that observation remained true in the stock market today. On Wednesday, U.S. equities put together a small but solid morning rally, only to give up all of their gains and more by the afternoon. Equities are still searching for direction as coronavirus headlines continue to hit the wires at a near-constant pace.
Of course, those headlines don’t help sentiment. There will be economic impact from the virus, but scared investors do not usually make the best decisions.
With more than 300 cases in Italy and more countries joining the list, global concern continues to rise. The Federal Reserve recently said the virus will have a “notable” impact on the Chinese economy. The market is now pricing in a 70% chance of a rate cut by April, up from just 12.8% a month ago.
Germany’s health minister says the country is facing a “coronavirus epidemic.” Peter Marks, head of the U.S. Food and Drug Administration’s Center for Biologics Evaluation and Research, said, “It’s fair to say we are on the cusp of the pandemic.”
This is not written to induce fear or panic. I only want to highlight what the news looks like from some respected organizations and sources.
Movers in the Stock Market Today
Boeing (NYSE:BA) needs another safety fix for the 737 Max before its anticipated return sometime in mid-2020. The metallic lining that serves as a shield against lightning strikes needs to be inspected and fixed. Otherwise, it could cause power loss in both engines if hit.
Due to differences over climate change policies, BP (NYSE:BP) will not renew its membership in three U.S. petroleum trade associations. However, BP will stay in the American Petroleum Institute. The company’s new CEO Bernard Looney announced plans for the company to have net zero carbon emission by 2050.
After Chesapeake Energy (NYSE:CHK) CEO Doug Lawler discussed a reverse stock split on the company’s earnings call, shares tumbled to an all-time low. It didn’t help that Lawler said a tough pricing environment has led to a “much softer commodity price outlook in 2020.” CHK now has an all-time low of 30 cents and will need to get back above $1 to avoid being de-listed.
Beyond Meat (NASDAQ:BYND) is joining forces with Starbucks (NASDAQ:SBUX) — well, at least in Canada. Starbucks will launch a Beyond Meat sandwich, featuring egg, cheese and a meat-less patty on an artisan bun. It will be available in about 1,200 Starbucks locations throughout Canada starting March 3.
Bob Chapek will be taking over as CEO of Disney (NYSE:DIS), after previously serving as chairman of the Parks, Experiences and Products unit. Bob Iger announced he will be stepping down as current CEO and will take on the role of executive chairman through Dec. 31. Both moves are effective immediately.
Speaking of management shake-ups, Salesforce (NYSE:CRM) also announced a change at the top. Co-CEO Keith Block is stepping down, leaving just founder, chairman and CEO Marc Benioff at the helm. Many expected Block to eventually succeed Benioff at Salesforce and the news is weighing slightly on shares Wednesday.
That’s despite CRM delivering a top- and bottom-line beat and raising its full-year earnings and revenue guidance above Street estimates. Further, management’s first-quarter outlook for sales and profit topped estimates.
Lowe’s (NYSE:LOW) is diving through notable support, falling more than 4% after reporting its fourth-quarter results. Earnings beat estimates, but revenue fell short, as did management’s outlook.
Virgin Galactic (NYSE:SPCE) has been on a tear, but is falling notably after reporting earnings, down around 15.7% in the stock market today. With virtually no sales and a loss of $73 million in the fourth quarter, investors were reminded of the risks in SPCE. Still, they see long-term upside, with shares up 150% in 2020.