By Lorcan Roche Kelly
The number of confirmed cases and fatalities from the coronavirus outbreak continues to rise, with governments announcing further measures to combat the spread. Hong Kong’s leader said the city will quarantine people arriving from mainland China, saying that “the next 14 days are critical.” Experts in the U.S. now see little hope the advance can be largely contained within China, and advise that governments should plan for the worst. The economic damage is mounting, with hundreds of global supply chains cut due to the extended holiday in China.
President Donald Trump’s annual State of the Union speech made no mention of the impeachment saga which is expected to wrap up with his acquittal in the Senate today. He spent much of the address describing economic gains in the U.S. under his leadership ahead of his re-election campaign. The animosity between Republicans and Democrats was on full display, with Trump refusing to shake House Speaker Nancy Pelosi’s hand before the speech, while she ripped up a copy of the text of the address when he finished speaking. Regardless of the partisan spectacle, it has already been a good week for the president, with news of his highest approval rating since taking office, according to a Gallup survey.
Officials from OPEC and its allies gathered for a second day of talks in Vienna for further technical discussions about whether to increase production cuts to counter falling global crude demand due to the virus. Estimates on the long-term impact on demand remain highly uncertain, and Russian resistance to further reductions means that a meaningful agreement may be difficult to reach. In the market this morning, a barrel of West Texas Intermediate for March delivery was trading at $50.72 by 5:45 a.m. Eastern Time.
Global equities remain focused on events in China, with reports of advances in producing a vaccine boosting sentiment. Overnight the MSCI Asia Pacific Index climbed 0.7% while Japan’s Topix index closed 1% higher. In Europe the Stoxx 600 Index had gained 1.1% by 5:45 a.m., with the regional gauge helped by stronger than expected final PMI readings for January. S&P 500 futures pointed to another strong start to trading, the 10-year Treasury yield was at 1.637% and gold was lower.
The excitement about Friday’s payrolls number gets going at 8:15 a.m. when ADP publishes its employment change number. The U.S. trade balance for December is at 8:30 a.m. Final January services and composite PMI from Markit is at 9:45 a.m., with ISM non-manufacturing at 10:00 a.m. Brazil’s central bank may cut rates at today’s meeting. General Motors Co., Qualcomm Inc. and Peloton Interactive Inc. are among the companies reporting earnings.