Republicans expect tax bill will become law this week: Reuters
Trump to focus on economic competitiveness in speech today: USA Today
US industrial output y-o-y rises 3.4% in Nov, a 3-year high: MarketWatch
NY Fed Mfg Index eases in Dec, but still reflects solid growth: NY Fed
Forecasts call for best holiday season for spending in 7 years: CNBC
Bitcoin futures debut on second futures exchange: Bloomberg
Rising student-debt defaults put US economy at risk: Business Insider 
GOP’s proposed corporate tax cut may be smaller than it appears: FiveThirtyEight

● Predicting Stock Returns: Implications for Asset Pricing
By David G. McMillan
Summary via publisher (Palgrave)
This book provides a comprehensive analysis of asset price movement. It examines different aspects of stock return predictability, the interaction between stock return and dividend growth predictability, the relationship between stocks and bonds, and the resulting implications for asset price movement. By contributing to our understanding of the factors that cause price movement, this book will be of benefit to researchers, practitioners and policy makers alike.
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The US stock market has been on a tear lately. Has the party gone too far? A rising chorus of analysts say that caution is advised, citing several valuation metrics. The Shiller PE Ratio, for instance, is currently at its second-highest level since the late-1800s.
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Final push for GOP tax bill faces obstacles: The Hill
FCC repeals net neutrality regulations for internet: Reuters
Jobless claims in US fell 11,000 last week, near multi-decade low: AP
US retail spending accelerates in November, beating forecasts: IBD
US Composite Output Index slides to 9-month low in Dec: IHS Markit
US business inventories fell in October amid solid sales growth: Reuters
Confidence among Japanese large manufacturers rises to 11-year high: RTT
Eurozone Composite PMI rises to 82-month high in December: IHS Markit

The Federal Reserve raised interest rates again yesterday, but the announcement of tighter policy followed news that the trend in core consumer inflation drifted lower. The combination of higher rates and a softer pricing pressure raise questions about the Fed’s plans for 2018.
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GOP’s legislative agenda threatened after Alabama loss: Politico
Fed raises target rate 50 basis points to 1.25%-1.50% range: CBS MoneyWatch
Fed chair Yellen is cautious on growth prospects for GOP tax cut: Bloomberg
US core consumer inflation dips to 1.7% y-o-y pace, close to 2yr low: Reuters
Retail spending growth in China accelerates: MNI
China’s central bank unexpectedly lifts short-term rates: RTT
UK’s Parliament votes to have final say over Brexit: Guardian
Fed’s median GDP growth forecast for 2018 raised 40bp to 2.5%: Federal Reserve

Building a “market portfolio” has obvious benefits for portfolio design. The asset allocation is relatively objective in the sense that Mr. Market chooses the weights. History suggests this is a competitive strategy. Even if it’s not slavishly followed, market weights can be useful for guidance in portfolio design and management. But the necessary task of estimating market values can be problematic, especially if the portfolio includes so-called alternative asset classes and strategies. A possible solution: using a statistical factor model to estimate a market portfolio.
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An upset victory for Dems in Alabama’s Senate race: The Hill
Federal Reserve on track to hike interest rates today: Reuters
Vote on final GOP tax bill expected next week: LA Times
US Sec. of State offers direct talks with N. Korea with no conditions: Reuters
UK loses jobs at fastest pace in two years: Bloomberg
Italy’s industrial output picking up speed: Bloomberg
Pension liability burdens for US states trending up: Fitch Ratings
US producer prices pop in Nov, suggesting inflation will rise: Reuters
If Trump fires Mueller, a constitutional crisis may follow: American Prospect
Nearly half of small US businesses in Nov expect stronger economy:  Haver

The year is winding down, which means that we’re knee-deep in newly minted 2018 investment outlooks. All the usual caveats apply, of course, but there’s a generous helping of perspective too. As an example, here’s a select sampling from recent publications that caught our eye:
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Today’s Senate election in Alabama will be widely watched: AP
Putin’s Mideast tour underscores Russia’s influence in the region: NY Times
Closing gaps in GOP tax plan remains a hurdle: Politico
US job openings slip in Oct as hiring heats up: USA Today
US Q4 GDP growth expected to accelerate: Now-casting.com