The world was stunned early in the week when reports that former auto exec, Carlos Ghosn, jumped bail, escaped Japan and settled in Lebanon. Lebanon does not have an extradition treaty with Japan and is where Mr. Ghosn is from; he claims he is escaping injustice rather than fleeing justice. President Trump said he would sign the phase one trade deal on January 15th as details surrounding the deal begin to come out. A shocking Friday report indicated a U.S. airstrike in Iraq killed Iran’s top military commander; this news sent shockwaves through the Middle East as the U.S. embassy in Iraq urged all citizens to leave the country immediately, and Iran’s supreme leader, Ali Khamenei, vowed retaliation stating, “hard revenge awaits criminals.” The order appears to mark a directional change from tightening economic sanctions to direct confrontation by the President.

After a banner year and decade for U.S. and global stocks, equities seemed to keep momentum in the first couple of trading days of 2020 until the news of Qassam Soleimani’s death. The airstrike took global equities lower and sent crude oil surging on Friday, capping off weekly losses for the former. Haven assets rebounded on this shock, sending gold higher and Treasury yields lower – adding to fixed income returns. In economic news, the ISM manufacturing survey was released for the month of December showing a greater contraction than expected in the U.S. and global PMIs produced a mixed picture between Asia and Europe.

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