By Lorcan Roche Kelly
Hong Kong reported its first case of the respiratory virus which has so far killed nine people in China, while the list of countries experiencing an incident of the illness continues to grow. The outbreak has arrived at the worst possible time for China, coming just before the Lunar New Year holidays that see millions of people travelling across the nation. Authorities in Beijing have announced a nationwide screening program, a move that has eased some investor nerves about the virus becoming a rerun of the 2003 SARS epidemic.
The first day of the trial of President Donald Trump in the Senate finished with all votes on procedure having followed party lines, showing no break in Republican ranks. The rules agreed mean that if no new witnesses are called, the whole thing could be finished as soon as next week. Trump, after his address in Davos yesterday, returns to Washington today.
The annual gathering of the powerful (and the rich) continues in Davos, Switzerland. Today sees speeches from Spanish Prime Minister Pedro Sanchez, European Commission President Ursula von der Leyen and Hong Kong Chief Executive Carrie Lam, as well as a panel with U.S. Treasury Secretary Steven Mnuchin and U.K. Chancellor of the Exchequer Sajid Javid. Trade issues are at the fore of many of the discussions, while climate continues to be the focus for a lot of speakers, with Bank of England Governor Mark Carney urging the U.S. to play a bigger role in fighting the risks it poses to the economy.
The commitment from authorities in China to contain the virus outbreak has given investors some comfort. Overnight, the MSCI Asia Pacific Index added 0.6%, with Japan’s Topix index, China’s Shanghai Composite Index and the Hang Seng Index all posting gains. In Europe, the Stoxx 600 Index was 0.1% higher at 5:50 a.m. Eastern Time as disappointing earnings and political uncertainty damped optimism. There were no such worries for S&P 500 futures which point to a gain at the open. The 10-year Treasury yield was at 1.771% and gold was flat.
Investors get another look at the strength of the U.S. housing market today with the November FHFA House Price Index at 9:00 a.m. and December existing home sales data at 10:00 a.m. There’s a health check on Canada’s economy with December CPI, new house prices and November wholesale sales at 8:30 a.m., all followed by the latest Bank of Canada rate decision at 10:00 a.m. Among the companies reporting earnings today are Johnson & Johnson, Baker Hughes Co., Abbott Laboratories, and Texas Instruments Inc.