A powerful rally on Friday helped boost prices on a weekly basis for most markets around the world via a set of exchange-traded products. With the exception of US real estate investment trusts (REITs), all the major asset classes ended the trading week on January 4 with gains.
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Bolton, in Israel, softens Trump’s plans for a quick exit from Syria: Politico
US Navy ship sails near disputed islands in the South China Sea: Reuters
Partial gov’t shutdown is now tied for 3rd longest with no end in sight: USA Today
Fed Chairman Powell hints at possibility of rate-hike pause in 2019: WSJ
Fed’s Mester: Subdued inflation could stop rate hikes: CNBC
Survey data points to slowdown in global growth to 27-mo low in Dec: IHS Markit
US Services PMI: ‘solid’ growth in December: IHS Markit
Eurozone growth falls to slowest pace in over 4 years via PMI data: IHS Markit
Retail spending in Europe rose more than expected in November: Reuters
Eurozone inflation slips to softest annual pace in 8 months: FT
US wages rose 3.2% in Dec from year ago–fastest gain since 2009: Bloomberg
Surge in US payrolls in Dec suggests recession risk is low: MW

● Too Smart for Our Own Good: Ingenious Investment Strategies, Illusions of Safety, and Market Crashes
By Bruce I. Jacobs
Summary via publisher (McGraw-Hill Education)
Financial crises are often blamed on unforeseeable events, the unforgiving nature of capital markets, or just plain bad luck. Too Smart for Our Own Good argues that these crises are caused by certain alluring investment strategies that promise both high returns and safety of capital. In other words, the severe and widespread crises we have suffered in recent decades were not perfect storms. Instead, they were made by us. By understanding how and why this is so, we may be able to avoid or ameliorate future crises—and maybe even anticipate them.
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Companies dramatically increased hiring in December, according to this morning’s monthly update from the US Bureau of Labor Statistics. The substantially larger-than-expected increase in private-sector employment suggests that the economic outlook is considerably brighter than implied by the stock market, which has fallen sharply in recent months.
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The US expansion remains on track for a moderate deceleration in fourth-quarter GDP growth, based on the median estimate for a set of nowcasts compiled by The Capital Spectator. The good news is that the estimate has been steady in recent weeks.
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House passes bill to reopen gov’t despite Trump’s opposition: The Hill
2-year Treasury rate briefly fell below Fed funds rate on Thursday: Reuters
Eurozone Composite PMI indicates weakest growth in 4 years: IHS Markit
Caixin China Composite PMI: modest growth rate ticked up in Dec: IHS Markit
Dallas Fed chief says central bank should pause on rate hikes: CNBC
Consumer confidence in China appears to be weakening: NY Times
US jobless claims rose last week, but still point to labor mkt strength: CNBC
ISM Mfg Index falls to lowest level in 2 years: CNBC
US job cuts rose 29% in 2018 vs. previous year: CG&C
US firms expanded payrolls in Dec; biggest monthly gain in nearly 2 years: MW

The expected risk premium for the Global Market Index (GMI) fell to an annualized 4.2% in December, moderately below the 4.6% estimate in the previous month. The revised projection for GMI (an unmanaged market-value-weighted portfolio that holds all the major asset classes) represents the ex ante premium over the projected “risk-free” rate for the long run.
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No sign of partial gov’t shutdown ending; new meeting set for Friday: The Hill
Apple cuts sales forecast, citing weak demand in China: Reuters
Apple’s sales warning reverberates in financial markets: Bloomberg
China’s economy is becoming a risk factor for int’l firms: CNBC
Global Mfg PMI for Dec slipped to lowest level in over 2 years: IHS Markit
US Mfg PMI: growth slowed to 15-month low in Dec: IHS Markit
Eurozone Mfg continued to slow in Dec via PMI survey data: IHS Markit
Small Business Jobs Index for US continued to fall in Dec: Paychex
Gold ticked up to highest close since June on first trading day of 2019: Kitco

Nearly every corner of the financial and commodity markets stumbled in 2018. Except for a modest gain in cash and a flat performance for a broad measure of US investment-grade bonds, last year was awash in red ink.
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Trump offers to ‘make a deal’ with Dems on partial gov’t shutdown: Fox
President Xi says Taiwan ‘must and will be’ reunited with China: BBC
Brazil’s new right-wing president promises sweeping changes: CBS
N. Korea’s Kim calls on US to end sanctions: NY Times
US stock futures fall after weak data on China’s mfg sector: Bloomberg
Eurozone mfg growth continued to decelerate in Dec: IHS Markit
Dallas Fed Mfg Index was surprisingly weak in Dec: Houston Chronicle
China can’t avoid an economic slowdown: National Interest
PMI survey data: China’s mfg output contracts for first time in 19 months: CNBC