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.
Macro Briefing | 28 January 2020
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:
Virus Worries Weighed On Stocks As REITs, Bonds Rose Last Week
China’s spreading coronavirus took a bite out of risk assets late last week, inducing a run into safe havens.
Macro Briefing | 27 January 2020
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
Book Bits | 25 January 2020
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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US Continues To Lead Global Equity Markets So Far In 2020
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).
Macro Briefing | 24 January 2020
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:
Correlations Profile | Major Asset Classes | 23 January 2020
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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Macro Briefing | 23 January 2020
China locks down a second city to halt spread of coronavirus: WSJ
Coronavirus is threat that will test China’s economy: SCMP
US envoy: slain Iran general’s fate awaits successor if he kills Americans: Reuters
Trump says US growth has slowed because of Federal Reserve: CNBC
ECB expected to keep deposit rate at minus 0.5% in today’s announcement: BBG
Will digital taxes lead to the next tariff war? NY Times
Global economy in ‘sweet spot,’ says Harvard University economist: Bloomberg
Low rates, low inflation threaten central bank independence: VoxEU
Existing home sales in the US accelerated in Dec, close to 2-year high: Reuters
US economic trend still sluggish but continued to edge up in Dec: Chicago Fed
Momentum Stocks Roar Higher In 2020 Start For Equity Factors
The year is still young but so far there’s a clear winner in the horse race among US equity factors: momentum. Following a mostly meandering performance in 2019’s fourth quarter, large-cap momentum has been on a nearly non-stop rally in the new year that’s left the rest of the field in the dust, based on a set of ETFs representing factor strategies in the US equity market.