| Stocks get ugly, rush to Treasuries, and virus risk stays high. Rout deepens The global stock selloff has already seen the S&P 500 Index enter the fastest correction — a fall of more than 10% — in history, taking just six days to lose 12% to yesterday's ugly close. There has been nothing in markets since then to point to any sort of recovery. Overnight the MSCI Asia Pacific Index dropped 2.5% while Japan's Topix index closed 3.7% lower. In Europe, the Stoxx 600 Index also plunged as equities in the region headed for their worst week since the 2008 financial crisis. S&P 500 futures pointed to more losses at the open, indicating a retreat for the seventh session in a row. Rushing for safety The global bond rally is gathering pace as investors look for somewhere to hide. U.S. Treasuries are showing some of the biggest gains with yields on two- and five-year securities falling to the lowest levels since 2016. The 10-year yield dropped below 1.2% this morning as rates on longer dated Treasuries hit unprecedented levels. While commodities are bearing much of the brunt of the risk-off move, it is worth noting that even gold is lower today. U.S. virus risk Authorities are expanding testing for coronavirus as California says it is monitoring more than 8,000 people for signs of exposure and the Center for Disease Control issued new guidelines to expand the number of people who will be tested. President Donald Trump called the response to the outbreak "an incredible achievement" even as signs of disorder began to emerge in Washington. Corporations, meanwhile, continue to take their own measures, with JPMorgan Chase & Co. among the latest to ban non-essential travel. In the rest of the world, both the number of cases and movement restrictions continue to mount. Turkey, Russia If a possible global pandemic wasn't enough to make markets nervous, tensions between Turkey and Russia are close to boiling point after an airstrike killed 33 Turkish soldiers in Syria. Russia denied involvement in the attack by Moscow-backed Syrian forces. NATO agreed to meet on Turkey's request for consultations today. A showdown between Turkey and Russia in Syria has been a risk for years as both countries back different sides in the nine-year civil war there. The main Istanbul stock index plunged 10% at the open, a move authorities responded to with a ban on short-selling and interventions to prop up the lira. Coming up… The personal income and spending report for January is expected to show strong wage growth with moderate inflation pressure when it is published at 8:30 a.m. Eastern Time. U.S. wholesale inventories and Canada's fourth quarter GDP are also due at that time. The latest University of Michigan Consumer Sentiment number is at 10:00 a.m. St. Louis Fed President James Bullard is today's sole monetary policy speaker. Earnings are due from Foot Locker Inc. and Wayfair Inc. What we've been reading This is what's caught our eye over the last 24 hours. And finally, here's what Joe's interested in this morning Earlier this week I wrote about gold, and how it's a good volatility hedge, but only up to a point. It stops being a good volatility hedge when you start getting anxious about managing cash flow and paying your bills. Since the world runs on U.S.-dollar denominated liabilities, when the bill collector (or the tax collector, or the margin clerk, or the landlord) comes knocking, you need cash. And selling gold might be one of your only options. We might be seeing a little bit of that effect emerge. This morning markets are selling off again, and Treasuries are surging, and yet gold is red. Gold was red yesterday too. It's something to watch. Now turning the page to Treasuries for a second, obviously the demand for these safe assets is mesmerizing, with yields on the long end plunging to record lows amid the virus fears. As I'm typing this, the 10-year is paying less than 1.2%. And yet, the persistent bid for Treasuries long precedes the virus fears. Even during the Q4 melt up, yields refused to budge higher. Yesterday on TV, we talked to Srinivas Thiruvadanthai of the Jerome Levy Forecasting Center about why rates refuse to go higher. He recently authored a report explaining the seemingly endless Treasury bull market. As he describes it, it all comes down to Big Balance Sheet Economics. It works like this: Financial assets have grown in size relative to the economy. Thus volatility in asset prices has a significant effect on the real economy. Thus central banks have to respond to asset price weakness by cutting rates. As such, even as the coupon on Treasuries has shrunk to virtually nothing, they've become a better and better volatility hedge over time, a valuable thing to hold even during the good times.  Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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