By Lorcan Roche Kelly
Concerns that the coronavirus outbreak is becoming a global pandemic are rising as new centers of infection outside China emerge. The mortality rate from the pneumonia-causing illness appear to be much higher in Iran and Italy, hinting at many undiscovered cases of infection. In China, President Xi Jinping warned that no effort should be spared to contain the outbreak in Beijing, while the annual legislative session has been postponed. An announcement easing the quarantine in Wuhan was withdrawn, with officials saying the lockdown in the city where the infection started will remain in place.
Investors are rushing for safety. Stock markets around the world are tumbling, with Asian equities falling overnight, Europe’s Stoxx 600 Index posting its biggest drop since 2016 and U.S. futures plunging more than 2.5%. The 10-year Treasury yield is below 1.4% and crude oil futures are slumping. While industrial commodities are hit, gold is proving to be the big winner from the risk-off move, with the yellow metal coming close to $1,700 an ounce.
Sanders wins Nevada
A commanding win in Nevada for Bernie Sanders showed he is building a broad base of support outside his traditional ‘Bernie Bros’ base. He won backing from Latinos, African-Americans, union workers, people without college educations and voters up to age 45. His double-digit win over the field, which did not include Michael Bloomberg who joins the ballot on Super Tuesday, shows Sanders grabbing votes from all his opponents. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)
Prepared to act
Finance ministers and central bankers from the Group of 20 nations meeting in the Saudi capital of Riyadh agreed on a “menu of policy options” to counter the coronavirus outbreak. However, the joint statement provided little in the way of details on a coordinated response. The manifesto did include a reference to climate change, over U.S. objections. Tax was also an issue, with U.S. Treasury Secretary Steven Mnuchin pushing back against European demands for a global digital tax agreement, saying Congress could prove a barrier to an accord.
It is another quiet day on the economic data front, with the Dallas Fed Manufacturing Index at 10:30 a.m. the only release of note. Cleveland Fed President Loretta Mester is today’s only monetary policy speaker. President Donald Trump is visiting India. There’s a busy earnings schedule with HP Inc., Intuit Inc., Hertz Global Holdings Inc., Shake Shack Inc. and Palo Alto Networks Inc. among the many companies reporting.