Daily Market Color January 3, 2020Political Instability in the Middle East Causes Flight to Safety for Investors Safe haven assets rally after U.S. airstrike raises Middle East tensions.The uptick in tensions comes on the heels of yesterday’s record-setting day in US equities that saw the S&P 500 hit. The American airstrike killed a top Iran general, Qassem Soleimani, raising concerns that Iran may retaliate with terrorism or by renewing attacks on oil tankers. The yield on the 10-year Treasury fell the most in three weeks as a result, plummeting to 1.83%. Elsewhere, crude oil prices gained as much as 4.2% on the news while the S&P 500 is 0.70% lower to start the day. People’s Bank of China cuts reserve ration in attempt to boost economy growth. The PBOC will cut the required bank reserve ratio by 50 basis points to stimulate the economy. The change will increase liquidity in the Chinese economy by $115 billion over the coming months. Since 2018, the central bank has cut the ratio 8 times and is expected to continue to do so in 2020 in an attempt to boost the decelerating Chinese economy. Day ahead.At 10:00 EST, the ISM Manufacturing Index and Construction Spending data will be released. The market expects that the index will improve from 48.1 to approximately 49 and construction spending to increase 0.3%.. The Fed will release the latest minutes of their December meeting at 2:00 EST. Markets currently price in an 88% likelihood of a Fed rate cut by year end. Fed officials Lael Brainard, Robert Kaplan and Charles Evans will all speak today as well.