Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Data: U.S. Treasury; Chart: Naema Ahmed/Axios

Growing worry over the widespread outbreak of the Wuhan coronavirus is compounding an already jittery market and flipping the switch from risk-on to risk-off, as investors sell stocks and buy bonds.

Driving the news: The S&P 500 posted its biggest single day percentage loss since October and long-dated U.S. Treasury yields fell, putting yields on Treasury bills that mature in three months just 6 basis points below Treasury notes maturing in 10 years.

Why it matters: The yield curve already has inverted out to seven years and is within spitting distance of the 3-month/10-year inversion that economists at the Fed call the "best summary measure" of economic downturn for the second time in less than a year.

  • The spread between the yields on the 3-month bill and 10-year note is the smallest since October when the curve first returned to positive territory after about four months of inversion.

What's happening: The death toll from the coronavirus reached 107 in China and the number of confirmed diagnoses rose to over 4,000, with confirmed infections in almost 20 countries or regions.

  • The virus is spreading and concern is growing right as stock euphoria looks to have peaked and a swath of risks have again reared their heads.

Details: President Trump's impeachment trial took an unexpected turn when the New York Times reported former national security adviser John Bolton's claim that Trump told him aid to Ukraine was dependent on the country investigating former Vice President Joe Biden and his son, Hunter.

  • Middle East tensions have again risen as rockets reportedly hit the U.S. Embassy in Baghdad on Sunday.
  • A growing number of market analysts and major investment banks have issued warnings about the increasingly bloated prices of U.S. equities.

What we're hearing: "We're ... getting pretty nervous that we'll see another inversion," Ian Lyngen, head U.S. rates strategist at BMO Capital Markets, tells Axios. "'Recessionary fear' headlines will surely make the rounds again."

  • "If you were on the negative side, the interpretive view of the inversion would be that a recession is closer than not," Ellis Phifer, market strategist at Raymond James, adds.
  • "The last few days are all about safe haven buying of Treasuries just in case the Wuhan virus becomes a worst case scenario," Lou Brien, rates strategist at DRW Trading, says in an email. "It is not likely this situation is resolved quickly, so the inversion likely has further to go."

Go deeper:

Go deeper

The new Washington

Illustration: Sarah Grillo/Axios

The Axios subject-matter experts brief you on the incoming administration's plans and team.

Rep. Lou Correa tests positive for COVID-19

Lou Correa. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Rep. Lou Correa (D-Calif.) announced on Saturday that he has tested positive for the coronavirus.

Why it matters: Correa is the latest Democratic lawmaker to share his positive test results after last week's deadly Capitol riot. Correa did not shelter in the designated safe zone with his congressional colleagues during the siege, per a spokesperson, instead staying outside to help Capitol Police.

Far-right figure "Baked Alaska" arrested for involvement in Capitol siege

Photo: Shay Horse/NurPhoto via Getty Images

The FBI arrested far-right media figure Tim Gionet, known as "Baked Alaska," on Saturday for his involvement in last week's Capitol riot, according to a statement of facts filed in the U.S. District Court in the District of Columbia.

The state of play: Gionet was arrested in Houston on charges related to disorderly or disruptive conduct on the Capitol grounds or in any of the Capitol buildings with the intent to impede, disrupt, or disturb the orderly conduct of a session, per AP.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!