Trillions

Global markets are flat to start the week as investors watch virus death count rise, and Trump plans to release a $4.8 trillion budget proposal.

The Express | Insight Before the Bell By Caleb Silver, Editor in Chief & Deborah D'Souza, News Editor  Monday's Headlines 1. Global markets mixed as virus death count rises 2. Trump to release $4.8 trillion budget  3. Tesla poised to rip higher at the open 4. Puerto Rican debt restructuring     Image courtesy: Erin Scott/Reuters Markets Today Global markets are mixed this Monday morning as investors eye the latest fatality count from the coronavirus, which reached 908 this morning. More than 40,000 cases have been confirmed so far according to global health officials, making the virus more widespread than SARS. Some Chinese factories resumed operations today for the first time since the Lunar New Year holiday, but restarting the country's massive supply chains has not been without issues according to various news reports. Some provinces and districts have now told companies to not return to work until March 1, according to officials.   Earnings season is winding down this week, and the focus has shifted from last quarter's results to the impact of the coronavirus on companies' outlooks for the first quarter of 2020 and beyond. Those companies with the greatest exposure to China will continue to be under close scrutiny, including apparel brands like Nike, Apple, given its supply chain exposure from companies like Foxconn, hotel and gaming companies including Wynn Resorts and Sands, and semiconductor companies like Nvidia and Applied Materials.   With a global virus still not contained, the New Hampshire Democratic primary, a $4.8 trillion budget proposal and more corporate earnings to digest, Monday is loaded up. Let's get ready! Headlines: Trump will release a $4.8 trillion budget proposal today, according to news reports. (See below) China's consumer price index (CPI), rose 5.4% year on year in January, the National Bureau of Statistics said Monday. The increase was up from 4.5% for December. Food prices grew 20.6% year on year last month, up from 17.4% in December, while non-food prices gained 1.6%, 0.3 percentage points higher than that of December. Tesla shares are up 6% pre-market after its Gigafactory 3 in Shanghai resumed operations. It's unclear if the supply chain is affected and if production levels will be as they were before. The local government told Reuters it will assist the firm. L Brands is nearing a deal to sell its Victoria's Secret brand to private equity firm Sycamore Partners, according to CNBC. The deal could be announced as soon as next week. Shares are up 6% in pre-market trading. Oscars 2020: Netflix took home two awards at last night's ceremony after being nominated for 24. The company denied a WSJ report that it spent well over $100 million campaigning for its films. The company's film chief Scott Stuber said the estimate is too high and they were "very smart" about spending. South Korea's Parasite made history by becoming the first non-English film to win the award for Best Picture at Oscars 2020. Writer and Director Taika Waititi told the press Apple's keyboards are so "horrendous" they make him want to go back to PCs. See the full list of winners here. Tesla CEO Elon Musk has some strong opinions when it comes to Facebook. See his tweet published yesterday.             SPONSORED BY FIDELITY INVESTMENTS Putting Your People Skills to Work Do you thrive on helping people? Financial services has an array of roles that could be a great fit. Here's why being a people person is perfect for a job in finance. Learn More »           Image courtesy: Hanna-Barbera/Giphy The Big Story Budget The summaries of President Trump's fiscal 2021 budget proposal have been leaked to the press, and we have a better idea of his election-year pitch for the economy.   Here's what we know it includes: Defense spending increase 0.3% to $740.5 billion, Non-defense spending lowered 5% to $590 billion NASA spending increase 12% to $25 billion Request for $2 billion toward building wall on Mexico border Environmental Protection Agency spending decrease 26% Cuts to social-safety-net programs  Foreign aid spending decrease 21% Extending 2017 individual tax cuts through 2035 costing $1.4 trillion   The budget naturally throws into focus the ballooning national debt and annual deficits. According to The White House, the federal budget deficit will fall below $1 trillion next year to $966 billion and the budget will be balanced after 2025. The economy will grow at an average rate of 3% for the next 15 years (CBO projects 1.7%) and the 10-year Treasury yield will rise to 3% in 10 years.   The Trump administration wants to slash spending by $4.4 trillion over the next decade and suggests $2 trillion in savings come from reducing access to mandatory spending programs like disability benefits, Medicaid and food stamps and changes to Medicare prescription-drug pricing. Experts expect this budget to be dead on arrival for this reason. For those unfamiliar with the U.S. federal budget process, the President will submit his proposal to both the Houses in Congress where budget resolutions are drafted. The Democrat-controlled House is not likely to accept the cuts to mandatory spending programs suggested, and Speaker Nancy Pelosi has already released a critical statement.  Read more: Federal Budget     Image courtesy: Sam Valadi/CC by 2.0 Big Number: $24 Billion That's how much of Puerto Rico's debt would be cut according to a new restructuring deal reached by the Financial Oversight and Management Board for Puerto Rico and certain bondholders on Sunday.   This agreement would reduce $35 billion of the recession-plagued U.S. territory's outstanding bond debt and other claims by 70% to less than $11 billion and cut its debt service by 56% to $39.7 billion from $90.4 billion. "Puerto Rico would completely resolve its legacy debt in 20 years, 10 years sooner than under the previous agreement," said the official press release, referring to the rejected earlier plan.   General obligation (GO) bondholders would face a 29% average value reduction and holders of Puerto Rico Public Buildings Authority (PBA) bonds a 23% average value reduction. Commonwealth creditors would receive $10.7 billion in new debt, half in GO bonds and half in COFINA Junior Lien bonds, as well as $3.8 billion in cash.   The deal will now need lawmakers' and a federal judge's approval. Governor Wanda Vazquez has panned it because it doesn't repeal pension cuts.   Read more: The Origins of the Puerto Rican Debt Crisis Vulture Fund More coverage: What to Expect in the Markets This Week Earnings season is winding down, but there are still a big names left. Also, Fed Chair Powell testifies this week. Read Now »   Outlook Brightens for Video Game Stocks Video game companies have posted mixed quarterly results, but upcoming catalysts could lift these stocks to new highs. Read Now »   Fannie Mae and Freddie Mac Are Ditching LIBOR Home mortgage giants Fannie Mae and Freddie Mac will stop purchasing loans tied to LIBOR after 2020, preferring the new SOFR benchmark from the Fed. Read Now »   Direxion Aims to Diversify Investing With Launch of New ESG-Focused ETF The company announced that it has launched a new ETF designed to help create long-term growth for investors. 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 . 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