Monday – February 10, 2020

Market opens lower as the Coronavirus death toll surpassed the SARS outbreak amidst predictions the number of cases will rise before peaking in mid-late February. 97 more people died in China yesterday. The Press discussed problems facing Chinese factories as they restart production following extended shutdown as Chinese authorities said they will continue to offer favorable policies to curb virus spread. The global supply chain is at risk of major slowdown if not shutdown. It will impact Tech devices, shoes, clothes, toys and many other consumer items. Global markets were lower overnight, led by Asia. The Democratic Party is limping into New Hampshire after an embarrassing experience in Iowa and having to explain Speaker Pelosi’s speech rip on top of the President having what many are calling his best week. The Trump administration is expected to release its fiscal year budget today. There are big cuts expected to help pay for increased military spending. Earnings Season is over 60% complete. So far, it’s been pretty benign. Those expecting an acceleration after the flat growth in 2019 are concerned the viral outbreak could take down numbers substantially. There is a risk the Street was too high already. But the most important factor to this Market has been central banks. Fed Chair Jerome Powell will be on Capitol Hill this week to discuss the US Economy and the future of monetary policy. It’s all about liquidity, liquidity, liquidity. This Bull has charged ahead in the face of so many issues and problems. So, stocks turned green as I type. Bonds are higher, with yields slightly lower. Gold is higher. Oil is lower. The Dollar is catching a bid. So is the VIX. This Market could go any direction, and fast. Hang on.

Have a great morning,

Mike Frazier

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