When it comes to making informed decisions regarding asset allocation, one essential step is projecting future risk premia. These projections can significantly shape the portfolio’s weight distributions. However, a common challenge arises: how do we accurately estimate these premia? The complexity of forecasting the future makes this task daunting. A productive approach is to manage expectations by delving into historical data. Within this realm, one often-overlooked method involves analyzing the historical distribution of premia to gain initial insights.
The World Health Organization has declared the coronavirus a global health emergency: WSJ
The US has advised its citizens to avoid traveling to China due to the virus outbreak: Reuters
The UK has confirmed its first case of the coronavirus: CNBC
Singapore has implemented travel restrictions for travelers from China: SCMP
Eurozone GDP growth in Q4 has slowed to its lowest rate in seven years: Bloomberg
Today marks Britain’s official exit from the European Union: CNN
Manufacturing activity in China remained steady in January, according to the PMI survey: Reuters
US jobless claims have stayed near a 50-year low, indicating a robust labor market: MW
US GDP rose by 2.1% in Q4, matching the previous quarter’s gain:
Although the new year is still in its infancy, US bonds have already begun to demonstrate impressive returns. It can be said that 2020 has been nothing short of fabulous for certain segments of the fixed income market, as evident through various exchange-traded funds.
The death toll from the coronavirus continues to climb, and the virus spreads across China: BBC
The Federal Reserve is maintaining interest rates, citing ‘moderate’ economic growth: USA Today
Britain is preparing for its official exit from the EU on Friday: BBC
Today’s US Q4 GDP report is expected to indicate moderate growth: Reuters
The EU recommends limiting, but not fully banning, high-risk 5G vendors: NY Times
The US trade deficit increased significantly in Q4: Reuters
The Pending Home Sales Index in the US fell by 4.9% in December: Reuters
The 10-year to 3-month Treasury yield curve appears set to invert… again: MW
The Federal Reserve is anticipated to keep interest rates steady in today’s policy announcement, yet the market is adjusting yields downward as investors seek refuge in safe-haven Treasuries amid growing concerns about the unfolding coronavirus situation.
China reports a rise in coronavirus deaths to 132: CNBC
The White House is contemplating a ban on US-China flights to combat the virus: USA Today
Both the US and Japan are evacuating citizens from China due to the outbreak: Reuters
British Airways has suspended flights to and from mainland China: WSJ
The Palestinian Authority has rejected Trump’s new Middle East peace plan: BBC
The Fed is likely to maintain steady interest rates in today’s announcement: Reuters
According to the CBO, US national debt could hit 98% of GDP by 2030: WSJ
Home prices in the US saw accelerated growth in November: CNBC
Core capital goods orders in the US increased the most in eight months last December: CNBC
The Atlanta Fed’s GDPNow estimate for Q4 GDP growth has increased to 1.9%: AF
The Richmond Fed Manufacturing Index has seen a robust rebound in January: RF
US Consumer Confidence Index has risen to a five-month high in January: MW
The outbreak of the coronavirus, affecting both China and other regions, is generating uncertainty regarding global economic activities at the start of 2020. However, the preliminary estimate for US GDP for the fourth quarter of last year is projected to demonstrate a growth rate similar to the moderate increase seen in Q3.
Infections due to the coronavirus in China have surpassed 4,500, with reported deaths reaching 106: CNBC
New York City prepares as the number of Chinese residents increases: NY Times
Analysts suggest that the dip in US stocks should not be attributed solely to the coronavirus: MW
Calls for testimony from Bolton in the impeachment trial intensify: WSJ
Italy’s populist leader has failed to secure a pivotal regional election: RFI
Cyprus has emerged as a new battleground for immigration issues in Europe: NY Times
Manufacturing output in Texas increased in January: Dallas Fed
Sales of new homes in the US declined in December, but the one-year trend remains strong:
The escalating coronavirus outbreak in China is adversely affecting risk assets, prompting a notable shift towards safe havens in the financial markets.
The death toll due to the coronavirus in China has reached 80: Bloomberg
The worries surrounding the coronavirus are affecting global stock markets: CNBC
Trading has been halted on stock exchanges in China due to the virus outbreak: SCMP
Rockets hit a US embassy compound in Baghdad on Sunday: CNN
Trump reportedly tied aid to Ukraine for political inquiries, per Bolton’s book: NY Times
Concerns rise about a potential synchronized housing slowdown globally: WSJ
The Fed is contemplating a policy to cap Treasury yields in the event of a recession: WSJ
Germany is experiencing a surprising decline in business sentiment for January: Reuters
The US economy exhibited strengthened growth in January, with the Composite PMI reaching a ten-month high: IHS Markit
Financial market stress in the US has diminished to a record low, the lowest since 1994: St Louis Fed
As we move further into 2020, the interdependencies among global markets and health crises highlight the importance of vigilant monitoring and adaptive strategies for investment and economic planning. The unfolding situations, particularly regarding the coronavirus, serve as a reminder of how external factors can significantly influence financial landscapes.
