Welcome to the thoughts in the market. I'm Andrew Sheets, Chief Cross Asset

Strategy for Morgan Stanley. Along with my colleagues providing a variety of

perspectives, I'll be talking about trends across the global investment landscape and how we put those

different ideas together.

It's Thursday, January 30th at 11 a.m. in New York.

Over the last week, many of my conversations with investors were not about the economy or

earnings or the US presidential primaries but about public health following

recent events that have developed in China. Addressing such issues from an investment perspective is hard,

given it's outside the expertise of most investors, myself included. But these events can also have

an impact on markets, and in this case they are also coming at a crucial juncture.

The challenge for markets is that investors like certainty,

but recent events raise more questions than they answer.

First, there is uncertainty over the extent of the spread of the coronavirus itself.

But even if that is resolved or looks more quantifiable,

there is another question we'll have to wait on.

What is the impact on the global economy?

Our economists currently estimate that the virus could ultimately reduce GDP growth in China

between half a percent and 1 percent in the first quarter of this year. But the impact can be hard to model,

potentially affecting consumer confidence, manufacturing supply chains, and even travel tourism.

Another part of this story is that it's impacting an economy that is central to this year's overall narrative.

Our economists see global growth getting better this year after weakness in 2019.

But almost all of that growth improvement was coming out of emerging markets,

...