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🎙"Either you deal with what is the reality, or you can be sure that the reality is going to deal with you." - See who said it and why it matters at the bottom.
Those who have bet on fear overtaking the market by piling into U.S. Treasury bonds have been rewarded handsomely so far in 2020, as prices on safe-haven government debt have risen and yields have fallen significantly.
Why it matters: The bond market is sending a clear signal that investors are nervous — tensions continue to ratchet higher in the Middle East, new wrinkles are revealed in President Trump's impeachment trial, and the coronavirus outbreak is claiming more lives.
What happened: Yields on the benchmark 10-year Treasury note hit a three-month low Wednesday and have fallen by 28 basis points since the beginning of the year.
Remember, the stock market boomed and bond yields rose in the fourth quarter of 2019.
But geopolitical risks have again taken center stage, and the market has responded with long-dated Treasury yields dropping back toward historic lows.
State of play: Chair Jerome Powell announced during yesterday's FOMC press conference that the Fed would continue the repo market injections and keep adding to its balance through April but would reduce the amount.
What's next: The World Health Organization will hold an emergency meeting today to discuss whether to declare a public health emergency of international concern due to the outbreak of the novel coronavirus, which has now killed at least 170 people and infected more than 7,800.
Investors poured a historic amount of money into bond funds for the third straight week, data from the Investment Company Institute shows.
By the numbers: Bond funds drew $16.1 billion worth of inflows for the week ending Jan. 22, the sixth largest total recorded since ICI began tracking flows.
Background: The week ended Jan. 8 saw the largest inflows to bonds ever recorded and the following week (which ended Jan. 15) saw the fourth highest total on record.
So far in 2020, the world's top asset managers have put their money where their mouths are, buying stocks from outside the U.S. and shunning domestic equities.
Flashback: Fund managers at major firms like BlackRock, Bank of America, JPMorgan and others said in their 2020 outlooks that they expected stocks outside the U.S. to deliver stronger returns this year.
What's happening: Big bets have been placed on foreign stocks, with positive inflows for global equity funds seen every week so far this year.
Yes, but: The inflows haven't translated to gains. MSCI's All-Country World Index excluding the U.S. has underperformed the S&P 500 by about 3 percentage points so far this year, according to FactSet data.
Boeing reported its first annual loss since 1997 as costs related to the global grounding of its 737 MAX reached $14.6 billion in 2019 and the company warned of another $4 billion in charges in 2020. (Al Jazeera)
China's economic growth could drop below 5% in the first quarter due to the coronavirus outbreak, an economist at a Chinese government think tank said. (Reuters)
Microsoft far exceeded earnings expectations thanks to record sales, driven by growth in its cloud-computing offerings. (WSJ)
Facebook beat earnings and brought in nearly $70 billion in revenue for 2019, up more than 25% from the year prior and up more than 1300% from 2012, but saw its stock fall in after-hours trading. (Axios)
Axios' Joann Muller writes: Tesla earned $105 million in net profit in the fourth quarter, ending the year on a positive note and declaring 2019 a turning point for the volatile electric car company.
Details: Record 2019 deliveries helped drive revenues up 19% over the prior quarter, but profit margins fell because Tesla sold more of the lower-priced Model 3. Shares jumped in after-hours trading.
Why it matters: The results reflect a string of positive news at Tesla, including the recent launch of its Chinese factory.
What to watch: Tesla said it has started to ramp production of its next vehicle, the Model Y compact SUV, this month.
Here are a couple highlights of Tesla's investor call with CEO Elon Musk and CFO Zach Kirkhorn:
Axios' Jennifer Kingson writes: For the first time in its 151-year history, Goldman Sachs, the storied investment bank, opened its doors to investors and others for a day of presentations about its various business lines — and how it has been remaking itself.
The takeaway: For the first time, the firm released earnings targets and talked openly and in detail about its plans and aspirations — aiming in part to appease shareholders who want to see Goldman's stock price rise.
By the numbers: They are targeting at least 13% return on equity within three years (vs. 10% in 2019) and an efficiency ratio — a measure of how well banks manage costs relative to revenue — of approximately 60% (lower is better; the figure was 68% last year).
Beyond Meat's stock price fell by 4.3% on Wednesday after Canadian fast food giant Tim Hortons announced it was pulling Beyond burgers from its menu.
Why it matters: Beyond Meat was one of 2019's biggest success stories — at its peak the stock rose 840% from its IPO price.
What they're saying: "Ultimately, the product was not embraced by our guests as we thought it would be," Tim Hortons said in a statement. "We may offer plant-based alternatives again in the future, but we have removed it from the menu for now.”
Yes, but: Beyond Meat's stock is still up by around 50% year to date and well above its $25 IPO price, even though it has fallen significantly from earlier highs.
Between the lines: The announcement came just two weeks after Beyond announced its Beyond D-O-Double-G breakfast sandwich collaboration with Snoop Dogg for Dunkin.
Alex Haley's "Roots" miniseries became the most-watched television drama of all-time. Its eighth and final part aired on Jan. 30, 1977, and was seen by 100 million viewers.
Editor's note: We removed an incorrect number from the third story in yesterday's Axios Markets. The CBO forecast called for total debt to approach 98% of GDP, but the estimate was not for $1.8 trillion.