Plague Inc

Global markets fell last week as the Corona Virus proved to be more severe than expected. The MSCI World Index fell -2.19% while the S&P 500 lost -2.10%.

Impeachment Trial

The likelihood of President Trump being acquitted rose sharply after moderate Republicans elected to bypass calling new witnesses in the Senate trial. The vote to call witnesses failed on a 49-51 vote. Key swing votes appeared to be open to hearing witnesses initially after John Bolton made claims that the President Trump directed aids to assist in the pressure campaign designed to make Ukraine announce investigations into Presidential front runner Joe Biden. The House Committee’s Adam Schiff’s erroneous statement that voting “against the president and your head will be on a pike” appeared to strengthen Republicans concerns that this was a partisan process.

Coronavirus

An unexpected uptick in the Coronavirus infection and mortality rates caused a mild panic in the markets over the past two weeks. Economic concerns centered on the virus’ impact on Chinese domestic growth. China has a disproportionately large share of global growth. Reports that the slowdown would reduce growth from around 6% to 2% would affect the International Monetary Fund projections of an economic growth recovery in 2020.

Source: https://blogs.imf.org/2020/01/20/tentative-stabilization-sluggish-recovery/

Earnings Season

With roughly half of the S&P 500 companies reporting earnings, the 4th quarter of 2019 is looking broadly positive. Earnings growth was broadly positive, with the basic materials and oil & gas sectors being the only exceptions.

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