DAILY INSIGHTS

Stocks down sharply as virus spreads. Stocks are under heavy selling pressure this morning amid fears that the coronavirus–known as COVID-19–will spread around the globe after reported cases in South Korea, Italy, Japan, and Iran climbed. Asian equities fell more than 1% overnight, while key European markets are down about 3%. The 10-year Treasury yield, near 1.4%, is within 0.1% of an all-time low, while gold is rallying.

Earnings season winding down. With 441 S&P 500 Index companies having reported, S&P 500 earnings growth for fourth quarter 2019 is tracking to a roughly 1% year-over-year increase, well above the 2.4% estimated decline as of January 20. Revenue growth of 3.5% represents a 0.9% upside surprise. Estimates have held up relatively well on mostly upbeat guidance.

Week ahead. This week’s U.S. economic calendar includes data on consumer confidence; new and pending home sales; revised fourth quarter gross domestic product; durable goods orders; and personal income, spending, and inflation data for January from the U.S. Bureau of Economic Analysis. Internationally, the most important data to watch will be China Purchasing Managers’ Index (PMI), where impact from the COVID-19 outbreak is expected to be significant. Meanwhile, earnings season continues with 41 S&P 500 companies slated to report.

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