Contagion

The mysterious respiratory disease in China which has already killed six people has entered a new phase with the illness spreading from person to person. The number of confirmed cases rose to 291, with the new virus a cousin of the severe acute respiratory syndrome, or SARS, that  killed almost 800 people 17 years ago. Authorities in the country say the outbreak is controllable ahead of the new-year travel season where hundreds of millions of people make journeys for the holidays. For investors, the memories of the impact of the SARS outbreak are increasing nerves, with markets selling off in Asia and Europe where luxury goods makers in particular were badly hit.

Trial date

The impeachment trial of President Donald Trump is set to begin at 1:00 p.m. Eastern Time today in Washington, with Democrats accusing him of “high crimes and misdemeanors” in relation to Ukraine aid and blocking a congressional investigation. While there is very little risk that the Republican-controlled Senate will vote to remove Trump from office, the trial itself is likely to inflame divisions during this election year. The first thing in the order of business is for the Senate to agree on how it will proceed, with the rules approved by a majority in that chamber.

Davos

While his impeachment trial kicks off in Washington, Trump is in Switzerland attending the annual Global Economic Forum in Davos. He tweeted on his way to the meeting to say his aim is to bring “Hundreds of Billions of Dollars” back to the U.S., with his speech trumpeting his domestic economic achievements. This year the meeting is dominated by climate change, with activist Greta Thunberg saying “pretty much nothing” has been done to address the issue.

Markets drop

Global markets are moving to a risk-off stance as investors try to price in the risks from the outbreak in China. Overnight, the MSCI Asia Pacific Index slipped 1% while Japan’s Topix index closed 0.5% lower. China’s Shanghai Composite Index ended the session down 1.4%. In Europe the Stoxx 600 Index had lost 0.7% by 5:50 a.m. with every sector trading lower. S&P 500 futures also pointed to red at the open, the 10-year Treasury yield was at 1.802% and gold dropped.

Coming up…

While today’s economic slate for the U.S. is blank, there was some good news from Europe where the German ZEW survey showed investor confidence rising to the highest level in four years. It is a big day for earnings with Netflix Inc.’s results expected to give a clear view of how the company is faring against new competition from Disney+. International Business Machines Corp., Haliburton Co. and United Airlines Holdings Inc. are among other companies announcing performance.