Global markets posted a varied set of performances for the five trading days through last week’s close. On the positive side, US stocks continued to rally, dispensing the best weekly return for the major asset classes, based on a set of ETFs. On the flip side, broadly defined commodities suffered the biggest weekly loss.
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US-Japan-S. Korea military drills aim to counter N. Korea Threat: NY Times
Southern California wildfires continue to wreak havoc: CNN
China’s inflation rate ticks lower in November: MNI
Bitcoin futures debut with a sharp increase: Reuters
Economists expect widespread rates hikes by central banks in 2018: Bloomberg
Payrolls in US rise 228,000 in November, beating expectations: Bloomberg
US wage growth still well below pre-2008-crisis rate: Paul Krugman
Investor optimism is unusually high: Heisenberg Report

● Blood Profits: How American Consumers Unwittingly Fund Terrorists
By Vanessa Neumann
Review via Kirkus Reviews
An alarming, and often alarmist, survey of how spending by consumers might support terrorist organizations and organized crime enterprises, especially drug cartels.
Neumann, the president of Asymmetrica, a consultant group that advises governments and corporations about combating illicit trade, refers to Venezuela, where she was born, to demonstrate how a leftist government takeover can become just as easily mired in corruption as a rightist one. Throughout the book, the author relies on examples from her personal life, her work as a consultant, research studies (from the United Nations and other sources), and her deeply felt ideology. She warns that terrorist groups and drug cartels have learned to join forces to assist each other in their lethal activities, and such an unholy partnership sometimes depends on the corruption of government officials.
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Private payrolls in the US continued to increase at a healthy pace in November, rising 221,000 from the previous month, the US Labor Department reports. The advance marks the second month of 200,000-plus growth. The year-over-year increase ticked up fractionally, suggesting that the labor market’s trend may be stabilizing after sliding for much of the year.
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Implementing Momentum: What Have We Learned?
Adrienne Ross (AQR Capital Management), et al.
December 2017
An abundance of academic evidence and theory exists on the efficacy and intuition behind momentum investing, yet a limited number of studies discuss the feasibility of running momentum portfolios in practice. And no study to date has directly analyzed implementation costs for a live momentum portfolio. As a result, many are still quick to dismiss momentum as difficult or costly to implement because of its high turnover. In this paper, we use seven years of live data to evaluate the implementability of momentum investing. We show that live momentum portfolios are capable of capturing the momentum premium, even after accounting for expenses, estimated trading costs, taxes, and other frictions associated with real-life portfolios.
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UK and EU announce breakthrough in Brexit negotiations: Reuters
Congress sends bill to Trump to avert gov’t shutdown: Bloomberg
China’s export growth beats expectations in November: RTT
IMF: rising bank debt poses “large risks” to China’s economy: BBC
Jobless claims in US fall for third week: Reuters
US job cuts jump 30% in Nov vs. year-earlier level: CG&C
Consumer credit for US rises in Oct by most in 11 months: MarketWatch
Wildfires rage across Southern California: Bloomberg

No one will confuse it with Bitcoin, but momentum is certainly red hot among US equity factor strategies, based on a set of ETFs. Stocks exhibiting relatively strong and persistent performance have outperformed for much of the year so far and the gap has widened in recent weeks.
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Widespread condemnation follows US decision on Jersusalem: BBC
Palestinian militant group calls for new uprising against Israel: Bloomberg
US increases troops in Syria to 2000: NY Times
US government shutdown risk is still rising: Reuters
ADP: Private US employment rose a healthy 190k in Nov: CNBC
Revised Q3 data still reflect strong productivity gain for US economy: RTT
Bitcoin blows past $14k; market cap exceeds most S&P stocks: MarketWatch
US sector correlation close to record low: Business Insider

Momentum investing – betting on the persistence of price trends in the short to medium term — has captured the crowd’s attention in recent years. Consider, for instance, the strong growth in ETF assets in the niche. The first fund launched a bit more than five years ago; today, there are dozens of momentum ETFs, collectively holding nearly $15 billion in assets, according to etfdb.com. That’s still a small piece of the total ETF pie, but the strategy’s allure could keep growth bubbling for years to come. What should investors expect? Does the rising interest in momentum raise concerns about the strategy’s expected return? For some insight, The Capital Spectator asked Wesley Gray at Alpha Architect, a wealth manager near Philadelphia. Gray, who previously worked as a finance professor, is an obvious source for discussing momentum. In addition to managing variations of momentum-based portfolios for clients, he and his team have written extensively about the strategy at AlphaArchitect.com, a popular investing blog. Gray is also the co-author of Quantitative Momentum: A Practitioner’s Guide to Building a Momentum-Based Stock Selection System
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Trump expected to recognize Jerusalem as Israel’s capital: Politico
Israel prepares for violence ahead of Trump’s Jerusalem decision: Haaretz
Palestinian envoy: US recognition of Jerusalem is ‘declaring war’: Jerusalem Post
US trade deficit widens in Oct, highest since Jan: USA Today
Survey data shows global growth steady at 2-1/2 year high in Nov: IHS Markit
Modest setback for US ISM Non-Mfg Index Nov after strong Oct report: CNBC
US Services PMI: Softer growth for sector in Nov: IHS Markit
Commercial real estate is the big winner with GOP’s tax cut: NY Times
10-yr/2-yr Treasury spread fell again on Tues, dipping to new decade low of 53bp: