28 January 2020

1) The threat of coronavirus spreading has caused stock markets to sharply fall over fears of the virus’ impact on the world economy. The death toll in China has risen to 81, and a fifth case has occurred in America. With China the biggest driver of global growth, the virus started in the place where it could have the biggest impact. There are worries that this virus caused market dip could spark a major correction in the markets.

2) General Motors plans to go all electric at its Detroit Hamtramck plant starting next year. GM is committing a $2.2 billion dollar investment in the factory to include $800 million dollars on tooling and projects related to trucks. The plant will be GM’s second builder of plugin models of cars. Only Tesla has sold electric cars in significant volume so far. The Hamtramck plant will employ 2,200 workers.

3) With the Federal Reserve’s bond portfolio swelling at a pace not seen since the 2010s, the Feds are faced with the tricky maneuver of turning the tap off soon. A misstep could have painful consequences, with the risk of what happens when the Feds stops increasing their balance sheet. Questions arise over what will happen to the stock markets when that liquidity spigot closes. This is part of the process called quantitative easing.

4) Stock market closings for – 27 JAN 20: The spread of coronavirus pushes markets down.

Dow               28,535.80    down    453.93
Nasdaq            9,139.31    down    175.60
S&P 500           3,243.63    down      51.84

10 Year Yield:    down   at    1.60%

Oil:    down   at    $52.83

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