* Russia warns of misunderstanding re: Ukraine ahead of talks with US
* Goldman Sach predicts four US rate hikes for 2022
* Key events to this week: inflation, interest rates and Fed testimony in Congress
* Emerging-market nations must prepare for US rate hikes, IMF advises
* Higher interest rates are boosting shares of bank stocks
* German 10-year yield poised to rise above zero for first time in 3 years
* US payrolls rose less than forecast in Dec but labor mkt near max employment
* US 10-year Treasury yield starts week at highest level in nearly two years:

● Financial Cold War: A View of Sino-US Relations from the Financial Markets
James A. Fok
Summary via publisher (Wiley)
Rising tensions between China and the United States have kept the financial markets on edge as a showdown between the world’s two largest economies seems inevitable. But what most people fail to recognise is the major impact that the financial markets themselves have had on the creation and acceleration of the conflict. In Financial Cold War: A View of Sino-US Relations from the Financial Markets, market structure and geopolitical finance expert James Fok explores the nuances of China-US relations from the perspective of the financial markets. The book helps readers understand how imbalances in the structure of global financial markets have singularly contributed to frictions between the two countries.

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The US 10-year Treasury yield rose to a nine-month high on Thursday (Jan. 6), which may be a prelude to setting a new pandemic high in the days ahead. If that happens, the increase would signal a higher probability that the benchmark rate would push above levels reached before the pandemic started in early 2020. During the 12 months prior to pandemic, the 10-year rate traded in the roughly 2%-3%-plus range.

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* Markets weigh possibility of three-facet Fed policy-tightening moves
* US 10yr Treasury yield briefly topped 1.75% on Thursday, a pandemic high
* Russia boosts influence in Kazakhstan amid political unrest
* Eurozone inflation ticked up to 5% in December, a new record high
* US jobless claims rose last week but remain near historic low
* US factory orders grew for a seventh-straight month in November
* US services sector growth slowed sharply in December via ISM survey data:

Forecasting is a necessary evil in investing. The very act of investing is an exercise in making assumption about future events. If you didn’t expect to book a profit, presumably you wouldn’t make the trade. The trouble starts when you move beyond this basic axiom and start making decisions about how to forecast, what to forecast, and over what time frame. But none of this changes the basic truism that risk is easier to forecast than return. There are caveats, of course, but even small relative advantages can be useful at times.

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* Fed minutes suggest possible rate hike set for March
* Rising bond yields take a bite out of tech stocks
* Russia sends paratroopers into Kazakhstan on Thursday to suppress uprising
* North Korea says it successfully expands at strongest rate since July
* US economy slowed in December but ended 2021 with strong upside bias
* US company payrolls rose much faster than expected in Dec, ADP reports:

The Global Market Index’s risk-adjusted performance continued to roar higher through the end of 2021, based on the trailing 3-year Sharpe ratio, a measure of return adjusted by volatility. GMI started looking a bit subdued in November, thanks to widespread selling. But the strong rebound for risk assets in December fired up risk-adjusted results for GMI, an unmanaged, market-value-weighted portfolio that holds all the major asset classes (except cash).

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* North Korea reportedly fires ballistic missile into the sea
* Protests in Kazakhstan intensify: government declares state of emergency
* Stock market ignores rising bond yields, for now
* Global manufacturing expansion continued at end of 2021
* Can US regain some of mfg output lost to foreigners? Companies aim to try
* Toyota tops GM for US car sales–first time foreign firm leads
* US home prices set to continue surging in 2022, Zillow predicts
* Job openings in US fell in Nov, but remained near record high
* Small-company wages up 4%-plus in December, a record high estimates Paychex
* US mfg activity slowed in Dec to 11-month low via ISM Mfg Index:

The expected risk premium for the Global Market Index (GMI) continued to hold at the 6.0%-plus level in December. Today’s 6.1% estimate (fractionally above the previous month’s forecast) marks the third straight month at 6.0% or higher.

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* US sets new daily record of 1 million-plus Covid-19 cases
* Severe cases and hospitalizations due to Covid-19 have yet to soar
* Passive ETFs pay a high price for predictable rebalancing techniques
* China’s factory activity grew at fastest pace in 6 months in December
* Supply shortages kept US manufacturing constrained in December
* UK manufacturing expansion continued at 2021’s close
* US construction spending rose for ninth straighth month in November: