Market Brief: April 20, 2020

Oil has been tumbling for months, but fell off a cliff on Monday in part because of a technical shift. The May crude futures contract expires on Tuesday, and when futures expire their price tends to converge with the spot price of the commodity. Anyone buying the May contract on Monday is likely planning on taking physical possession of the oil. And no one right now seems to want to own a barrel of oil at any price.

For the quarter, the enterprise-computing company posted revenue of $17.6 billion, down 3.4% from a year earlier, but in line with Street estimates. IBM said revenue was up 0.1% when adjusted for divested businesses and currency. Non-GAAP profit was $1.84 a share, a nickel ahead of the Street consensus at $1.79 a share.

United expects to borrow up to $4.5 billion from the Treasury Department’s loan program—part of the Cares Act package of financial support for the airline industry. The company has also applied for $5 billion to help cover payrolls through September, including a $3.5 billion grant and $1.5 billion as a loan. United said it had $6.3 billion in cash and liquid investments as of April 16, including $2 billion in an undrawn credit facility.

The high-end department store is considering a filing as soon as this week, according to a Reuters report citing people familiar with the matter. The retailer is also said to be negotiating with creditors to obtain financing so it can maintain some operations during a restructuring.

As part of the Cares Act, the government’s Covid-19 rescue package, Congress provided $349 billion to help small businesses keep paying their employees. The Paycheck Protection Program, or PPP, is overseen by the Small Business Administration. Commercial banks give out the money as loans that will be forgiven if the small businesses hire back their workers by June. Although the program was meant to help businesses with 500 or fewer employees, big hotel and restaurant chains successfully lobbied to be included.

The company’s first quarter numbers on Monday, however, look terrific. DuPont earned about 83 cents a share from $5.2 billion in sales. Wall Street analysts were looking for 68 cents from $5 billion in sales. The results easily beat expectations.

In a research note Monday, BofA Global Research analyst Justin Post argues that Amazon’s enormous investment in logistics has created a valuable asset that will allow the company to become a major player in the package-delivery sector—and not just for goods sold on Amazon.com. Post contends the company’s delivery capabilities could be worth $100 billion to $230 billion by 2025.

Internet gambling revenues (excluding sports betting) in New Jersey rose 66%, to $65 million in March, the state reported recently. Online gambling includes slots as well as table games like blackjack. New Jersey is a leader in internet gambling. “We believe the impact of Covid-19 could spur more states to legalize online casino and sports betting,” Morgan Stanley gaming analyst Thomas Allen wrote in a client note.

Alibaba said in a statement on Monday that it plans to invest an additional 200 billion yuan (approximately $28 billion) in cloud technology over the next three years, including operating systems, servers, chips, and network.

Ultomiris has Food and Drug Administration approval in two rare diseases: atypical hemolytic uremic syndrome and paroxysmal nocturnal hemoglobinuria. It is the successor to another Alexion drug, Soliris, which is expected to face generic competition in the near future.