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

● The New Class War: Saving Democracy from the Managerial Elite
By Michael Lind
Review via The Washington Examiner
The New Class War: Saving Democracy from the Managerial Elite [is] a short volume that examines the populist revolts in the U.S., Britain, and Western Europe. All of them, Lind says, are part of a transatlantic class war being waged on three fronts — politics, economics, and culture. For a brief period after World War II, working-class and rural constituencies enjoyed real bargaining power in all three realms. Since then, the West has seen a “technocratic neoliberal revolution from above” that has systematically destroyed the working class’s ability to participate in national life. The result has been the rise of working-class populism, culminating in Brexit and the election of President Trump.
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Shares in American companies dominated last year’s bull run in stock markets around the world and 2020 is a repeat performance, at least through yesterday’s close (Jan. 23).

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Does China’s virus outbreak threaten the global economy? NY Times
Eurozone economy remains close to stagnant in January: IHS Markit
German economy shows sign of modest recovery in January: IHS Markit
UK economy returns to modest growth in January via PMI survey: IHS Markit
Japan’s economy posts a rebound in January: IHS Markit
US jobless claims rose last week but still near lowest in decades: CNBC
KC Fed Mfg Index remains weak in Jan, but avg for regional banks still positive
US Leading Economic Indicator’s 6-mo trend dipped deeper into the red in Dec:

Return correlations for the major asset classes have edged down in recent years, which implies that diversification opportunities have increased, if only marginally. The correlation readings are only modestly softer overall and for several asset class pairings it’s fair to say that nothing much has changed. But reviewing all the key slices of global markets by way of pairwise return correlations shows that the median for this risk metric has slipped, based on a set of proxy ETFs.
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