A key part of informed decision-making on asset allocation is estimating future risk premia and using those projections to influence weights in the portfolio. The question, of course, is how to estimate premia? There are no easy answers for the simple reason that forecasting the future is complicated. A good way to start, however, is by managing expectations via history. There are many possibilities on this front, including one that’s often overlooked: profiling the distribution of historical premia for a preliminary dose of perspective.

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Coronavirus declared global health emergency by World Health Organization: WSJ
US warns citizens not to travel to China due to virus outbreak: Reuters
UK confirms first case of coronavirus: CNBC
Singapore closes border to Chinese travelers: SCMP
Eurozone GDP growth in Q4 eased to slowest gain in 7 years: Bloomberg
Britain will leave the European Union today: CNN
China manufacturing activity was flat in Jan via PMI survey: Reuters
US jobless claims remain near 50yr low, signaling strong labor market: MW
US GDP rose 2.1% in Q4, matching Q3 gain and lifting 1-year trend:

The new year is not quite a month old but that hasn’t stopped US bonds from piling up impressive returns. For the strongest corners of fixed income, it’s fair to say that 2020 has been spectacular so far, based on a set of exchange-traded funds.

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Coronavirus death toll continues to rise and spreads throughout China: BBC
Fed holds rates steady, cites ‘moderate’ economic growth: USA Today
Britain prepares to formally leave EU on Friday: BBC
Today’s US Q4 GDP data expected to report moderate growth: Reuters
EU recommends limiting, but not ending, use of high-risk 5G vendors: NY Times
Trade deficit rose sharply for US in Q4: Reuters
US Pending Home Sales Index fell 4.9% in December: Reuters
10yr-3mo Treasury yield curve looks set to invert… again: MW

The Federal Reserve is expected to leave interest rates unchanged in today’s policy announcement, but the market is repricing yields lower as the crowd embraces safe-haven Treasuries anew as concerns mount that the worst is yet to come for the spreading coronavirus.

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China deaths from coronavirus rise to 132: CNBC
White House considers ban on US-China flights to fight virus: USA Today
US and Japan evacuate citizens from China due to virus outbreak: Reuters
British Airways suspends flights to/from mainland China: WSJ
Palestinians dismiss Trump’s new Middle East peace plan: BBC
Fed expected to keep interest rates steady in today’s announcement: Reuters
CBO projects US national debt to reach 98% of GDP by 2030: WSJ
US home price gains accelerated in November: CNBC
US core capital goods orders in Dec rise the most in 8 months: CNBC
Atlanta Fed’s GDPNow estimate of Q4 GDP growth ticks up to 1.9%: AF
Richmond Fed Mfg Index rebounds sharply in January: RF
US Consumer Confidence Index rises to 5-month in January: MW

The coronavirus that’s roiling China and beyond is creating uncertainty about global economic activity in early 2020, but this week’s initial estimate of US GDP for last year’s fourth quarter is on track to post a gain that’s comparable to Q3’s moderate rise.

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Coronavirus infections in China rise above 4,500; deaths climb to 106: CNBC
New York, with large Chinese population, prepares for coronavirus: NY Times
Don’t blame the slide in US stocks on the coronavirus: MW
Pressure rising for Bolton testimony in impeachment trial: WSJ
Italy’s populist leader fails to win key regional election: RFI
Cyprus is Europe’s new front line for immigration battle: NY Times
Texas factory output accelerated in Jan: Dallas Fed
US new home sales fell in Dec but 1-year trend still healthy:

China’s spreading coronavirus took a bite out of risk assets late last week, inducing a run into safe havens.

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China’s death toll from the coronavirus rises to 80: Bloomberg
Coronavirus worry weighs on global stock markets: CNBC
China halts trading on stock exchanges as virus outbreak spreads: SCMP
US Embassy compound in Baghdad was hit by rockets on Sunday: CNN
Trump Tied Ukraine aid to political inquiries, according to Bolton book: NY Times
Does a housing slowdown around the world threaten the global economy? WSJ
Fed considers policy of capping Treasury yields in next recession: WSJ
German business sentiment deteriorated unexpectedly in January: Reuters
US growth strengthens in Jan as Composite PMI rises to 10mo high: IHS Markit
US financial market stress falls to record low (since 1994): St Louis Fed