* Putin visits Belarus, raising concern of new front in Ukraine war
* China appears to be facing surging Covid cases
* US worried that new China Covid outbreak will spawn new virus mutations
* Bank of Japan widens 10-year government bond yield range
* Global oil market remains tight: Saudi Aramco, world’s largest oil producer
* Meta may face $12 billion in new fines from European Union
* US homebuilder sentiment continues falling in December:
Most of the major asset classes suffered last week as markets reassessed the risk of ongoing hikes in interest rates and elevated recession risk, based on a set of ETFs for the trading week through Friday, Dec. 16. The main exception: US bonds rallied amid firmer demand for safe havens.
* Putin ‘planning for long war’ in Ukraine, predicts NATO chief
* US border cities prepare for expected migrant surge
* Tech firms focus on heading off tougher regulation
* Morgan Stanley analyst: drop in US corporate profits could rival 2008 era
* Goldman Sachs planning deep job cuts as it faces sharp business downturn
* US Senate banking chair considers banning crypto
* Germany business climate sentiment improves for third month in December
* Fed officials reaffirm plan to extend hawkish policy to tame inflation
* The housing market appears relatively insulated from the downturn this time:
Moritz Schularick (editor)
Summary via publisher (U. of Chicago Press)
The 2008 financial crisis was a seismic event that laid bare how financial institutions’ instabilities can have devastating effects on societies and economies. COVID-19 brought similar financial devastation at the beginning of 2020 and once more massive interventions by central banks were needed to heed off the collapse of the financial system. All of which begs the question: why is our financial system so fragile and vulnerable that it needs government support so often? For a generation of economists who have risen to prominence since 2008, these events have defined not only how they view financial instability, but financial markets more broadly. Leveraged brings together these voices to take stock of what we have learned about the costs and causes of financial fragility and to offer a new canonical framework for understanding it. Their message: the origins of financial instability in modern economies run deeper than the technical debates around banking regulation, countercyclical capital buffers, or living wills for financial institutions.
The recession warnings have been piling up this year, but thanks to growth in consumer spending and hiring the US economic expansion has endured. Yesterday’s surprisingly weak retail sales data for November, however, suggest that the consumer sector may be buckling. If so, that leaves the labor market as the last major firewall that keeps the economic trend from slipping over the edge.
* Senate passes bill to avoid end-of-week government shutdown
* Russia continues to attack Ukraine with missile barrage
* US jobless claims fall to 3-month low, highlight tight labor market
* Eurozone economic contraction eased in December via PMI survey data
* European Central Bank hikes interest rates, warns of more to come
* NY Fed Mfg Index declined in December but outlook is relatively bright
* Philly Fed Mfg Index slumps to lowest level since May 2020
* US industrial output fell in November, weighed down by fall in manufacturing
* US Q4 GDP nowcast revised down to +2.8% via Atlanta Fed’s GDPNow model
* US retail sales fell more than expected in November:
The US Treasury 10-year yield continues to look elevated relative to CapitalSpectator.com’s “fair-value” estimate, which is based on the average of three models. That’s no assurance that the market will trim the benchmark yield, but current conditions still suggest that the odds appear skewed to a neutral/downside outlook for this rate.
* Biden announces efforts to promote trade between US and Africa
* Markets appear more optimistic on inflation outlook vs. Fed’s expectations
* Fed Chairman Powell on rate hikes: “We still have some ways to go”
* China Covid spike predates ending zero-tolerance policy, says WHO director
* China retail sales fall sharply, more than expected in November
* Atlanta Fed business inflation expectations fall ‘significantly’ to 3.1%”
* US import prices slide for fifth straight month in November
* Federal Reserve slows rate hikes, lifting target rate by 1/2 point:
The US equity market has been clawing back some of its losses recently, but reviewing results through a factor-risk lens shows dividend yield leading the field with the only positive performance for 2022, based on a set of ETF proxies.
* Fed expected to slow rate hikes in today’s policy announcement
* Biden’s Africa summit begins with goal of resetting relations
* Will the $60 price cap on Russian oil disrupt Putin’s economic strategy?
* FTX founder Sam Bankman-Fried charged with criminal fraud, conspiracy
* Quant strategies on track to post a strong run for 2022 results
* Eurozone industrial output falls more than expected in October
* UK inflation pulls back from 41-year high in November
* US consumer inflation eased again in November, rising less than forecast:
