Shake It Off

Global markets rise as new cases of novel coronavirus slow.

The Express | Insight Before the Bell By Caleb Silver, Editor in Chief & Deborah D'Souza, News Editor  Wednesday's Headlines 1. Global markets rise as virus concerns ebb 2. Boeing has a new 737 Max issue 3. Facebook enters the ring for IRS fight 4. What happens to China's Q1 GDP?     Image courtesy: Michaela Rehle / REUTERS Markets Today Investors are more optimistic today and global markets are climbing after data showed the rate of new confirmed cases of coronavirus infections in China has slowed the most since Jan. 29. There's also hope China's central bank will do more to help the economy tomorrow. The total number of deaths in the country has crossed 2,000. U.S. futures are edging higher a day after Apple's earnings admission caused the S&P 500 and Dow to drop.   We continue to hear from more companies about the impact of China's lockdowns. Adidas said business activity in Greater China has fallen a whopping 85% since Jan. 25. Rival Puma says the health crisis in the region will hurt its first quarter profits and sales as stores remained closed and tourism fell.   There is a slew of economic data releasing today in the U.S., including producer price index, building permits and housing starts. The FOMC will publish its January meeting minutes at 2 p.m. ET. Tonight we'll also see former New York City Mayor Michael Bloomberg make his Democratic debate debut in Nevada.   In the words of Taylor Swift, keep cruising.   Headlines: Boeing said foreign object debris were discovered in the wing fuel tanks of several 737 Max airplanes in storage. The company is conducting an internal investigation and has added that the issue will not delay the grounded plane's return to the skies slated to happen this year. Groupon stock is 25% lower in pre-market trading after it missed earnings and revenue estimates. Revenue was $2.2 billion in 2019, down 16% compared from 2018. In order to "get back on a growth trajectory," the e-commerce company will exit the Goods business and focus on the $1 trillion local experiences market. Nike has announced a series of leadership changes a month after John Donahoe took the helm as CEO. Andy Campion, the current Executive Vice President and CFO, will become COO. The CFO role will be taken by Matthew Friend, currently CFO of Operating Segments and Vice President of Investor Relations. Heidi O'Neill, President of Nike Direct, will become President of Consumer and Marketplace. GE is looking to design and sell engines for Airbus' wide-body planes, according to a Wall Street Journal report. The move comes as Boeing, another GE customer, cuts back production of its similarly large 787 Dreamliner. Sources say Airbus executives are enthusiastic. Ally Financial is buying non-prime credit card and consumer finance lender CardWorks for $2.65 billion. Ally is looking to diversify its offerings and become a a full-service financial provider with the deal. LendingClub is acquiring Radius Bank in a cash and stock transaction valued at $185 million. This makes it the first U.S. fintech firm to buy a bank. In this week's edition of "Things Elon Musk Said on Twitter": The Tesla CEO called his conversations with Bill Gates "underwhelming" after the Microsoft co-founder said he chose a Porshe Taycan as his first electric car and talked about range anxiety. Gates made the comment during an interview with YouTuber Marques Brownlee.              SPONSORED BY FIDELITY INVESTMENTS Investing in Women in More Ways Than One Hiring and retaining women is essential to making financial expertise broadly accessible. Here's why Fidelity is prioritizing women's career growth and potential. Learn More »           Image courtesy: Giphy The Big Story Facebook Could See Giant Tax Bill A long-running dispute between Facebook and the Internal Revenue Service (IRS) regarding transfer pricing finally entered a tax court in San Francisco yesterday. The IRS has accused the tech giant of dodging taxes a decade ago by undervaluing technology it transferred to its Irish subsidiary. Facebook valued its intellectual property at $6.5 billion, but the IRS contends it was worth $21 billion and the move was deliberate in order to lower taxes paid in the U.S..   Facebook says the valuations were justified since 2010 was a time of "great risk and uncertainty for the company.""This trial is about transactions that took place in 2010, when Facebook had no mobile advertising revenue, its international business was nascent, and its digital advertising products were unproven," said spokesperson Bertie Thomson to AFP. The government agency accused the company of crafting a "Tale of Two Facebooks" by claiming 2010 was "the worst of times" when it was actually "the best of times."    In a recent SEC filing, the social network operator said that if it loses the case and the IRS applies its position to subsequent tax years, it will have to pay $9 billion plus interest and penalties.    ProPublica has reported on Facebook's complicated dealings with the IRS and this article provides more insight for anyone interested in what went on at HQ.     Image courtesy: Macrotrends Read more: Double Irish With a Dutch Sandwich     Image Courtesy: CNBC The Big Number: 3.5% That's the first quarter GDP growth rate Morgan Stanley is predicting for China if the COVID-19 outbreak peaks in April and disruptions continue into March. It is the worst of three scenarios the bank looked at for a recent note reported on by CNBC (see chart above). Currently it expects manufacturing production to reach 60% to 80% of the usual levels by the end of this month and return to normal by middle to late March.    Meanwhile, Moody's this week revised its GDP growth forecast for China to 5.2% in 2020 from 5.8%. "In our baseline forecast, we assume the rate of disease transmission will slow in the coming weeks. Under this assumption, the economic impact will be limited to Q1 and a level of normalcy will be restored by the beginning of Q2," it said in a report. More coverage: 3 Charts Suggest Bullishness on Transportation Stocks Active traders often look to the transportation sector for clues about market direction. These charts suggest prices are headed higher. Read Now »   Drug Distributor Stocks in Focus Amid Opioid Settlement Jostling Leading drug distributor stocks remain sensitive to ongoing opioid settlement negotiations. Here are crucial technical levels to watch. Read Now »   Investors Walking Away From ViacomCBS Stock ViacomCBS has attracted little or no buying interest since the December merger despite Wall Street happy talk. Read Now »   Walmart Stock Could Hit New 2020 Low Walmart is trading lower after missing fourth quarter profit estimates and could sell off to a new low before bottoming out. Read Now »   How can we improve The Express? Tell us at theexpress@investopedia.com Enjoy The Express?  Copy and share the link below to invite friends to sign up: https://link.investopedia.com/join/53o/00-fwd-theexpress CONNECT WITH INVESTOPEDIA Email sent to:  geezers.mail@gmail.com. To view online click here . To update your newsletter preferences or unsubscribe, click here.   114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC. All Rights Reserved | Privacy Policy