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🎙 "Although I believe I’m going to come up a little short today I still wanna thank all you that have been pulling for me and showing your support. I’m grateful for all of you!" - See who said it and why it matters at the bottom.
Illustration: Sarah Grillo/Axios
Despite facing "tough" U.S. sanctions, Russia's economy is picking up steam, and its financial markets are delivering massive rewards to investors.
Why it matters: In an era in which the U.S. has made economic punishment its foreign policy weapon of choice, Russian President Vladimir Putin and others continue to defy the U.S. and are finding the consequences to be quite bearable.
Driving the news: Far from crumbling under the weight of sanctions, Putin recently introduced a set of constitutional reforms that the New York Times suggests "could create new avenues for him to rule Russia for the rest of his life."
What's happening: Russian stocks and bonds had a banner year in 2019 and look poised for more of the same in 2020.
What they're saying: Of the 21 countries TIAA Bank follows, which includes the U.S., eurozone, Singapore and other global heavyweights, "Russia is at the top of the list," TIAA Bank president of world markets Chris Gaffney, tells Axios.
With most U.S. sanctions directed at individuals, rather than Russia as a whole, investors "decided that the fundamentals of the Russian debt market are so attractive that they completely outweigh the sanctions," Ed Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle, tells Axios.
The big picture: It isn't just Russia that has managed to fight off the strain of U.S. economic sanctions. The U.S. has dramatically increased sanctions on Syria, Cuba, North Korea, Turkey and Iran with the goal of regime change or shifts in behavior, and so far has little to show for it.
In stark contrast to broader emerging markets, which have badly underperformed U.S. stocks, Russia's benchmark RTS index has driven returns well above the S&P 500 over the last year.
Yes, but: "It's important not to confuse financial markets with economic well-being," George Friedman, founder and chairman of Geopolitical Futures, tells Axios.
Italian Five-Star leader Luigi Di Maio is set to resign as leader of the party in power ahead of an expected defeat in regional elections on Sunday. (Bloomberg)
Amazon is creating checkout terminals that would allow people to link their credit card information to their hands, giving them the opportunity to pay for things with their palms rather than with a card or phone. (WSJ)
President Trump doubled down on threats to put tariffs on European autos if a trade agreement is not made with the EU, but declined to set a deadline. (WSJ)
The U.S. and Hong Kong both announced the first confirmed cases of coronavirus and China's National Health Commission said the death toll from the virus has risen to nine, with 440 confirmed cases across 13 provinces.
Why it matters to the market: "There's no question that economic activity in Asia will be affected as we head into one of the busiest travel weeks in China," BK Asset Management managing director of FX strategy Kathy Lien wrote in a note to clients late Tuesday.
The big picture: The coronavirus could negatively impact markets from currencies to oil, as declining air travel and sentiment weaken demand across industries.
Confidence in Germany’s growth outlook has continued to increase, with the latest survey of investor expectations rising to the highest in more than four years.
Details: The ZEW economic research index of expectations for the next six months increased to 26.7 in January, significantly exceeding economists' estimates.
Of note: If you're reading this newsletter without images displayed, you're doing it wrong.
With the "phase one" trade deal signed, major asset managers have taken their eyes off of the trade war a bit and begun to focus on the upcoming U.S. presidential election.
Why it matters: The trade war dropped to the No. 2 concern among respondents for the first time since May, while worries about a "bond bubble" popping rose to the No. 3 worry.
Watch this space: A number of recent analyses have found that the stock market is currently showing some irrational exuberance, but BofA's model shows "investors are bullish but not euphoric,” chief investment strategist Michael Hartnett said in a note.
Of note: Inflation expectations rose 14 percentage points from last month to net 56% of participants, the highest level since November 2018.
The price of rhodium, a fine metal used in fine jewelry and car parts, has skyrocketed over the last few months. It has jumped by more than 50% in just the first three weeks of January, reaching a price more than six times that of gold and the highest since late 2008, FactSet data show.
What's happening: "Surging demand from carmakers is partly to blame," the Economist writes. "More than four-fifths of global demand for both rhodium and palladium comes from the automotive industry. The metals, together with platinum, help convert toxic gases in a vehicle’s exhaust system (such as carbon monoxide) into less harmful substances before they exit the tailpipe."
There are few groups of people I loathe more than the sanctimonious Baseball Writers' Association of America. It is a group so full of self-serving, faux outrage and longing for the "good old days" of baseball purity that they have refused the game's all-time leaders in hits and home runs entry into the Hall of Fame.
They are a truly sorry and contemptible bunch.
By far my biggest gripe with these lowlifes was their long-running refusal to allow entry to anyone who played for the Colorado Rockies. They literally — for going on 30 years now — have enforced a ban on players for the high crime of playing baseball in the city of Denver.
Finally, yesterday, the Guardians of Baseball Chastity voted the great Larry Walker — one of the greatest hitters ever, whose career numbers are better than Derek Jeter's — into the Baseball Hall of Fame.
To you bunch of jerks, I say thank you. It's about time. #GoRockies #Rocktober #BBWAASucks
The quote is from Larry's Twitter because he thought he wasn't going to make it in this year, which was his final year of eligibility.