Ben Graham famously described Mr. Market’s psychological state from day to day as vulnerable to erratic swings of optimism and pessimism. But recent history shows that the crowd’s exhibited a mostly stable view on commodities and energy by consistently discounting these assets by relatively aggressive standards, based on a set of exchange-traded products. That was true in our last update (Aug. 22, 2019) and remains so today.

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Iran disputes that it accidentally shot down Ukrainian jetliner: Bloomberg
House passes resolution to curb Trump’s war powers: CNBC
Softer growth expected in today’s Dec employment report for US: Reuters
World Bank warns that risk of debt crisis is rising: Guardian
US jobless claims fell again last week, closing in on 50-year low: MW
Upbeat consumer confidence contrasts with gloomy CEO sentiment: CNBC

The benchmark rate on the 10-year Treasury has been trending higher since October, suggesting that the sharp slide that unfolded earlier in 2019 has run its course. But the economic outlook is still sufficiently murky to reserve judgment on whether the latest bounce in this key yield is a limited revival after an arguably excessive slide or the start of a sustained rise.

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Trump decides to de-escalate war risk with Iran: ABC
US-Iran tensions are down but risk is still lurking: CNBC
China’s vice premier expected to sign trade deal with US next week: Reuters
US likely added 2.14mm jobs last year–least since 2011: Bloomberg
World Bank cuts global growth expectations: WB
German industrial production rebounded sharply in November: Reuters
Gloomy economics conference contrasts with expanding economy: NY Times
ADP: US private jobs growth rebounded in Dec but 1yr trend continued to ease:

The US economy remains on track to expand at a moderate pace in the final three months of 2019. The outlook is based on a median nowcast for the initial estimate of the fourth-quarter GDP report that’s scheduled for release by the Bureau of Economic Analysis on Jan. 30. If correct, output will rise at or near Q3’s pace, which suggests that recession risk remained low through the end of last year.

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Iran retaliates, firing missiles at US bases in Iraq: CNBC
Taiwan’s pro-independence president looks set for re-election: NY Times
Eurozone economic sentiment edged up for second month in Dec: Reuters
Germany’s manufacturing ‘misery’ continued in Nov as new orders fell: Reuters
US services sector continued to expand moderately in December: ISM
US trade deficit narrowed to 3-year low in November: MW
Atlanta Fed’s Q4 GDP growth nowcast for US holds at moderate +2.3%: AF
US factory orders continued to decline via 1-year trend in Nov:

The bull run in US equities in recent years strikes many investors as something other than a run-of-the-mill rally. Although Mr. Market has dispensed several sharp corrections, it’s hard to overlook the fact that a buy-and-hold strategy for, say, an S&P 500 Index fund has been a mostly non-stop party of late. Is that unusual? The answer depends on your definition of “unusual” and your choice of a time window. For some perspective, let’s stack up the latest trailing performances for the S&P against its track record through the decades.
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Bolton willing to testify but no sign Senate will issue subpoena: Politico
White House denies visa to Iranian diplomat to attend UN meeting: The Hill
Does escalating US-Iran conflict offer strategic opportunities for China? CNN
France and EU prepare to respond to new US tariffs: AP
Global growth picked up in December via PMI survey data: IHS Markit
Is latest jump in Eurozone inflation, retails sales a temporary bounce? ING
US Services PMI: moderate growth picked up to 5-month high in Dec: IHS Markit

The trading week begins with a spike in uncertainty following last week’s US airstrike that killed Qassem Soleimani, Iran’s top military official. Although most of the major asset classes posted gains last week and still reflect across-the-board profits for the one-year trend, repricing risk has become substantially more challenging – and critical.

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Sec. of State Pompeo warns Iran against attacks on US interests: NY Times
Trump threatens Iraq with sanctions after US troops asked to leave: BBC
Huge crowds mourn Iran’s military commander at funeral in Tehran: Reuters
House to vote on limiting Trump’s military powers re: Iran: CNBC
Confusion hangs over Trump’s Middle East strategy after Soleimani Killing: BBG
NY Fed president: US should stick to 2% inflation target: WSJ
Monetary experts question if Fed can effectively fight next recession: MW
Brexit economic uncertainty spreads near and far: BBG
Revised Eurozone PMI: economy remained near stagnation in Dec: IHS Markit