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Five Things to Know in World Business Today

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These translations are done via Google Translate

By Lorcan Roche Kelly

Further coronavirus restrictions, Apple earnings due, and Trump lawyers wrap up defense. Here are some of the things people in markets are talking about today.

Travel ban

In the latest move to stop the spread of a deadly virus, China has announced it will stop individual travelers to Hong Kong and close some border checkpoints. The move comes as the death toll from the illness climbs to 106, with 4,515 confirmed cases in China. The country’s top securities regulator called on investors to evaluate the impact of the outbreak “rationally and objectively” ahead of the reopening of markets there on Monday. Investors might argue that they are already being rational as they wipe $46 billion off the value of European luxury goods makers, a sector that is expected to be among the hardest hit by the slowdown in Chinese retail sales over what is usually the busiest shopping period.

Apple earnings

One company that will be keeping a very close eye on developments in China is Apple Inc., with its supply chain concentrated in the country. The company has been increasing production to meet higher-than-anticipated iPhone demand, with reports saying it has already asked suppliers to boost output by 10% in the first half of this year. This all means that investors, who were bullish going into today’s earnings report, will be keen to hear any guidance on how the company sees the outbreak hurting production.

Defense rests

President Donald Trump’s lawyers will wrap up their defense in the Senate impeachment trial today. Senate Majority Leader Mitch McConnell will try to keep his GOP majority onside over the coming days to allow a final vote, which is all but certain to result in Trump’s acquittal, on Friday. However, the revelations in a draft of a book by former National Security Adviser John Bolton have bolstered the case for calling more witnesses, according to some Republican senators. Should there be new witnesses called, the trial could continue past the Feb. 4 State of the Union address even if the outcome remains almost certain.


Markets mixed

A tentative recovery in global markets was snuffed out by the imposition of further travel restrictions in China this morning. Overnight the MSCI Asia Pacific Index dropped 0.8% while Japan’s Topix index closed 0.6% lower. In Europe, the Stoxx 600 Index gave up early-session gains to trade broadly unchanged by 5:45 a.m. Eastern Time. S&P 500 futures pointed to a small rebound at the open, the 10-year Treasury yield continued its slide to trade at 1.591% and commodities remained under pressure.

Coming up…

U.S. durable goods orders for December at 8:30 a.m. are expected to show a small expansion after November’s disappointing result. The national home price index for November is at 9:00 a.m. and Richmond Fed manufacturing is at 10:00 a.m. The White House will release its long-awaited Middle East peace plan. While Apple is likely to grab the headlines, Pfizer Inc., Xerox Holdings Corp., United Technologies Corp., and Starbucks Corp. are also reporting earnings today.

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