By Lorcan Roche Kelly
WHO says
The World Health Organization declared the coronavirus outbreak a global health emergency as the number of cases continues to climb, with 9,809 confirmed in China. The first cases in the U.K. were reported this morning. The economic costs of the outbreak are mounting ahead of the reopening of Chinese markets on Monday, when a barrage of selling is expected. Even as equity trading reopens, the extension of the Lunar New Year holiday means that at least two-thirds of the country’s economy will stay shuttered next week.
Brexit day
The countdown to the U.K.’s exit from the European Union finally reaches its end today as the country ceases to be a member of the bloc at 6 p.m. Eastern Time. Muted celebrations and commemorative coins aside, little will actually change as the two sides have agreed a transition period until the end of this year to allow negotiation of the new relationship between both sides. The one thing analysts and economists seem to be in agreement with is that the future for the U.K. is uncertain.
Acquittal
It seems that Senate Majority Leader Mitch McConnell has been able to muster enough votes to block the calling of new witnesses in the impeachment trial of President Donald Trump. Should Republicans win those votes, then the Senate will move quickly to the vote on impeachment which Trump is certain to win, wrapping up the inquiry today. An acquittal today would give Trump the opportunity to claim vindication ahead of his State of the Union speech on Tuesday.
Markets slip
Global equities are lower again this morning. Overnight the MSCI Asia Pacific Index erased an earlier rally to drop 0.2% while Japan’s Topix index managed to hold on to some gains to close 0.6% higher. In Europe the Stoxx 600 Index was 0.6% lower at 5:50 a.m. after data showed the euro area barely managed to eke out an expansion in the final quarter of 2019. S&P 500 futures pointed to a drop at the open, the 10-year Treasury yield was at 1.558% and gold gained.
Coming up…
At 8:30 a.m. the PCE report is expected to show U.S. consumer spending and household income slowed in December, while the inflation component may rise slightly to 1.6%. The latest University of Michigan Consumer Sentiment number is at 10:00 a.m. Earnings focus will turn to the oil market today with Exxon Mobil Corp. and Chevron Corp. both reporting. Caterpillar Inc., often cited as a global economy bellwether, also announces results before the bell.
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