Daily Market Color

Rates Climb as Coronavirus Fears Fade


Risk assets and rates bounce higher as coronavirus fears begin to abate. Global equities rose across the board yesterday, futures suggesting the rally will continue into today after speculation that several different drug cocktails may work to cure the virus outbreak. Official statistics have 24,597 confirmed coronavirus cases, and deaths at 494. Some have questioned the veracity of those statistics, particularly after Tencent posted a figure of 154,023 confirmed cases and 24,489 deaths before quickly revising to the official figures. That said, fears seem to have abated for the time being, the 10-year yield following stocks higher to 1.64% (nearly 13 basis points off the recent low).



President Trump makes case for reelection in State of the Union speech, touting strong economy. With impeachment proceedings all but wrapped up, President Trump turned his attention to the upcoming 2020 election, emphasizing his economic record and drawing contrasts between himself and the Democratic field. Amid that backdrop, a winner from the Iowa caucuses will finally be announced- results thus far showing Pete Buttigieg leading Bernie Sanders by 1.5%.



Day ahead. This morning, ADP released its employment report, which was in-line with investor expectations at 291,000. The international trade balance was also released, which continued to sharply widen. The headline consensus was a deficit of $48.2B with the actual number coming in higher at $48.9B. The EIA petroleum status report will be released later this morning which could provide insight on the corononavirus outbreak’s impact on crude oil prices. Lael Brainard from the Fed Board of Governors will speak. Peloton and General Motors are among the companies reporting earnings today.


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