Authored by Richard Truesdell and Keith Lehmann via American Greatness,

As was proven during the 2024 election cycle, we are well beyond the scope of mere bias in the legacy media. Given the shrinking audience influence coupled with massively declining income from severe loss of cable subscriptions and advertising revenue, American media outlets have chosen a different course: straight-up propaganda intended for consumption by a niche audience, half of which don’t know they’re being lied to and the other half not caring.

Broadcasting has been replaced with “wish casting.” How else can we explain the completely lopsided coverage from the alphabet news outlets, which provided Kamala Harris with “78 percent positive coverage, while these same networks have pummeled former President Donald Trump with 85 percent negative coverage?” And it was even more biased on CNN and MSNBC.

Major media outlets broadcast opinion-centric journalism that push narratives, ranging from “extinction-grade climate crisis” pronouncements to the “existential threat to democracy” dangers of a second Donald Trump presidency. There are no “two sides” reporting here; it is commentary passed off as “journalism” that wraps news stories around pre-packaged and carefully circulated talking points that favor the establishment bureaucracy and big-moneyed interests over American citizens.

Simultaneously, Trump is a threat to democracy and will jail or even execute his opponents, is in service to Vladimir Putin, and will wreck the economy with his extremist MAGA agenda that is tied directly to Project 2025. Trump will launch World War III, he’ll outlaw homosexuality and transgenderism, and he’ll cancel all future elections and become dictator for life. It will be the end of America, and a vote for Kamala Harris will be our “new way forward.”

Nobody Left to Lie To

The American legacy media always had a tenuous relationship with its viewers and readers, losing its credibility every time the public finds that what is reported turns out to be completely untrue. Exhausted from the lies of omission and outright fabrications, the legacy media found itself without much of an audience and surprisingly little influence on the 2024 presidential election.

But a ridiculous narrative is shaping up, one plainly untrue on its face, that the reason for Trump’s victory was not inflation, illegal immigration, or the economy, or that Harris-Walz was an outrageously insulting offering by the Democrats. No, the reason Trump sailed to victory was “the massive influence of right-wing media.”

Let that last statement sink in for a moment.

That’s right, you can blame One America News, X, Newsmax, Fox News (still considered “right-wing” by many, especially on the left), assorted podcasts, and especially Joe Rogan, for putting Trump back into the White House. And the legacy media, who provided hideously lopsided coverage against Trump for years and conducted the presidential and vice-presidential debates in a grossly biased fashion, whines that their massive investment in Kamala Harris was thwarted by a relatively tiny segment of alternative media and citizen journalism. You have delusional, far-left, Democrat operatives like Julie Roginsky being taken to the woodshed by Scott Jennings, saying that the media and social media, especially, are now controlled by conservatives, as seen in this hilarious clip from CNN.

Need more evidence? Watch compressed election night coverage on ABC, CBS, NBC, CNN, and, worst of all, MSNBC to see how optimism at 8 PM EST morphed to concern by midnight and outright despair around 3 AM when Trump declared victory.

Both left-leaning cable channels, CNN and MSNBC, didn’t call the race until shortly after 5 AM on Wednesday. The Associated Press, the New York Times, CBS, and ABC all called the race around 5:30 AM. This was hours after the result was no longer in doubt.

Well, it actually was. But it’s not because of the outsized influence of conservative media; it was because of the decimated influence of the legacy media. Most Americans no longer need solid evidence to conclude that they are being lied to by legacy outlets; thus, they turn to alternative media for truthful content and credible opinion.

This obvious shift in content consumption should be solid proof that the left can no longer control, frame, or even influence public opinion. The growth of alternative media and Elon Musk’s refusal to censor conservative thoughts and opinions on X/Twitter have loosened the multi-generational grip legacy media has had over journalism and have brought new voices into the mix, offering a mere balance in information. But the American Left cannot tolerate informational balance.

The Censorship-Industrial Complex

Information control and manipulation have been historically vital for Democrats and the left in their efforts to sell bad ideas and gaslight the public to believe outright lies. As opposed to both 2016 and 2020, the left-leaning mainstream media posted an epic fail in 2024.

We believe the American Left will not accept losing control over the public’s access to information without a fight. They will therefore redouble their efforts to regulate “online misinformation” and prevent inconvenient truths from reaching the public.

You can call this the “censorship-industrial complex” that has deep roots in government, academia, tech companies, and NGOs. The international community in particular has a penchant for censorship of ideas that don’t follow along with those in charge. Deplatforming and preventing the monetization of content are powerful tools to silence conservative voices. We have already seen tech companies using algorithms to shadow-ban new media and limit their reach in search engines.

As legacy media loses whatever audience it still commands and alternative media allows for conservative voices to be heard, we expect naked attempts by the American Left to “legally” violate the First Amendment through the legislative process. Collusion with the “censorship-industrial complex” is already underway, and Democrats will try to codify their information control scheme into law.

If there was ever a solid argument for conservative control of the Supreme Court, this might be it. Thankfully, as we have noted previously, Donald Trump will be likely given the opportunity to nominate replacements for Justices Alito and Thomas before the 2026 midterms. Both will likely not run the risk of stepping down after the midterms in the unlikely event that Democrats regain Senate control in 2026.

If one or both step down before the midterms in 2026, Trump can nominate young, reliably conservative jurists in their 40s who, after Senate confirmation, can sit on the bench for the next 30 years. Having nominated at least five Supreme Court justices over his two terms, Trump’s influence on the Supreme Court and the constitutional guardrails the court provides will last to mid-century. That prospect scares Democrats whose legislative agenda will be stymied for decades to come.

Yesterday Ukraine launched six US-made long-range ATACMs missiles and four British-made Storm Shadow missiles against Russian territory, many of which were reportedly intercepted over the Rostov region. Russia said in the aftermath that swift and appropriate retaliation would come, and already Friday morning it appears Moscow has made good on its threat.

Significantly, major Russian missile barrages have targeted the capital of Kiev. At least one person was killed in the attack, which also damaged a number of foreign embassies. A dozen other people were injured in these strikes.

The Kyiv City Military Administration said that the Albanian, Argentinian, North Macedonian, Palestinian, Portuguese and Montenegrin embassies were damaged in the attack. It appears they were all housed in one large building.

Ukraine’s foreign ministry called the attack “barbaric” after severe destruction in some districts, including an area which saw a gas pipeline damaged and five cars catch fire. Five among the injured have been hospitalized.

Portugal, whose diplomatic mission was among those hit, summoned the Russian ambassador to condemn the assault and damage. “It is absolutely unacceptable that any attack should target or have an impact on diplomatic premises,” the Portuguese government said in a written statement.

The Kremlin has specified that it was direct retaliation for the Thursday attacks on Rostov using Western weapons:

The city’s authorities claim Russia used a combination of Kinzhal ballistic missiles and either Iskander-M or KN-23 systems.

The Russian defence ministry, meanwhile, claimed the attack was a response to Kyiv’s strike on the Kamensky Combine in Russia’s Rostov region and said Moscow forces had launched a strike with long-range precision weapons targeting the Ukrainian security service’s command post and the Kyiv Luch design bureau, which develops various anti-aircraft and missile systems.

This morning, russia attacked Kyiv with ballistic missiles. Terrorists killed at least one person and wounded seven.

Ukraine needs more air defense systems. russian terror must be stopped.

📹: @United24media pic.twitter.com/j6UcitHUSE

— Defense of Ukraine (@DefenceU) December 20, 2024

Moscow has repeatedly warned that it could begin targeting “decision-making centers” in Ukraine as a result of the US greenlighting long-range strikes on Russian territory utilizing Western weapons.

During Thursday remarks before the annual press Q&A with the Russian president, Putin warned that more Oreshnik hypersonic ballistic missiles could be used, emphasizing that there is no defense against them. He further warned that if the West and US want to test Russia’s red lines, then some kind of missile “duel” could happen.

“Let them propose… some kind of technological experiment – a kind of high-tech duel of the 21st century, let’s say,” Putin proposed at the Moscow event.

“Let them name some object, let’s say, in Kyiv, concentrate all their air defense and missile defense forces there, and we will hit it with Oreshnik and see what happens. We are ready for such an experiment. Is the other side ready?” he posed threateningly. 

Apparently the several embassies were all located in a single building which suffered damage:

BREAKING –
A building which hosts the embassies of Portugal, Argentina, Morocco, North Macedonia and Palestine was damaged in this morning’s Russian attack on Kyiv.

I took this photo approx 90 minutes after the explosion – windows blown out and shattered. https://t.co/sYra63S1ug pic.twitter.com/3SfcDEFucU

— Alex Cadier (@alexcadier) December 20, 2024

The fact that Russia launched powerful missiles on areas of the Ukrainian capital known to house embassies is a dangerous precedent and could be some intentional signaling. What happens if the US, UK, German, or French embassies are hit or suffer damage? It could be a sure path to WW3.

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

A New York tax preparer, nicknamed The Magician, pleaded guilty to duping the Internal Revenue Service (IRS) with fake returns filed on behalf of his clients for several years, according to the U.S. Department of Justice (DOJ).

Rafael Alvarez, 61, was charged with one count of conspiring to defraud the United States and stealing government funds and one count of assisting in the preparation of false tax returns, according to a Dec. 17 statement from the agency.

“The charges arise from Alvarez’s orchestration of a decade-long, $145 million tax fraud scheme to file tens of thousands of federal individual income tax returns that included false information designed to fraudulently reduce the individuals’ tax burden.”

Alvarez pleaded guilty on Tuesday and, as part of the plea, agreed to pay the IRS $145 million in restitution. The tax preparer also forfeited more than $11.84 million he collected from his criminal actions.

The charges stem from Alvarez’s actions roughly between 2010 and 2020, when he was the CEO and owner of Bronx-based ATAX New York, LLC, a “high-volume tax preparation company.”

Alvarez and his employees submitted false information about customers on their tax returns, like fake business expenses, non-existent capital losses, and false itemized tax deductions. This enabled them to reduce the tax liability of ATAX customers and increase IRS refunds for the clients.

In total, roughly 90,000 federal income tax returns were prepared by ATAX.

“Alvarez was so consistent at falsifying ATAX customer tax returns that he became known to ATAX’s customers as ‘the Magician,’” the DOJ stated.

The count of conspiring to defraud the United States carries a potential maximum prison sentence of five years, and the false returns count carries a jail term of up to three years. Sentencing in the case is set for April 11.

“Today’s guilty plea, in one of the largest ever tax frauds by a return preparer, should serve as an important reminder to tax professionals that this Office will vigorously investigate and prosecute tax offenses,” said Acting U.S. Attorney Edward Y. Kim.

According to the IRS, anyone who assists or prepares federal tax returns for an individual in exchange for a payment must have a preparer tax identification number (PTIN). The PTIN must be renewed every year. As of Dec. 2, close to 850,000 people had current PTINs in the United States.

Fraud Cases

Multiple legal actions have been taken against fraudulent tax preparers over the past months.

In November, a tax preparer from Somerville, Massachusetts, was convicted of preparing false tax returns. Between 2012 and 2020, Yves Isidor, the defendant, prepared and filed over 1,200 tax returns for clients. He added false tax claims like non-existent medical and dental expenses and charity gifts.

The clients received refunds to which they were not entitled. During the trial, six taxpayers testified they had no idea that Isidor had added false items to their tax returns.

“When someone hires an individual to complete your tax returns, they have a right to expect honesty, professionalism, and integrity. Most importantly, you expect them to provide accurate information to the IRS,” said Acting United States Attorney Joshua S. Levy.

“Yves Isidor lied to his clients, who had no idea that he had improperly filed tax returns on their behalf until they were contacted by investigators and alerted to the false information in their returns. Tax fraud is not a victimless crime. We all suffer when people like Yves Isidor lie and cheat the tax system.”

Earlier in October, another tax preparer was sentenced to 24 months in federal prison, also for filing false income returns.

The defendant filed 83 federal returns over a roughly three-year period that contained fake items like business expenses, tips, and salaries. Most of the clients neither owned a business nor discussed any business expenses with the preparer.

In April last year, the IRS warned against unscrupulous tax preparers who seek to “tempt taxpayers into fraud” through various schemes while charging high fees.

Even if a taxpayer is duped into filing a return with false information by the preparer, “taxpayers are legally responsible for what’s on their return,” the agency said. The IRS recommends that people use reputable professionals to file returns.

“I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!” President-elect Donald Trump warned early Friday morning on Truth Social. 

According to the Office of the US Trade Representative, the US trade deficit in goods and services with the EU totaled $131.3 billion in 2022. Following Trump’s presidential victory last month, the EU has been gearing up for a potential trade war with Trump. 

The good news is that the US has become the world’s largest crude oil producer and the top LNG exporter. As Brussels and Washington work aggressively to curtail Russia’s energy flows into Europe—whether crude oil, refined products, or NatGas—the US is well-positioned to fill the gap. 

Bloomberg noted that the euro traded slightly higher, up about .3% to $1.0398, amid signs that EU officials may increase energy imports from the US in 2025 to avoid a full-blown trade war and remain in Trump’s good graces.

In late November, German Foreign Minister Annalena Baerbock told the Group of Seven conference in Italy that the EU is “well-prepared for the possibility that things will become different with a new US administration,” adding, “If the new US administration pursues an ‘America first’ policy in the sectors of climate or trade, then our response will be ‘Europe united.'”

The EU Commission president, Ursula von der Leyen, said last month that US LNG has the potential to replace the bloc’s remaining imports of Russian LNG. 

“We still get a whole lot of LNG via Russia, from Russia,” von der Leyen said, adding, “And why not replace it with American LNG, which is cheaper, and brings down our energy prices.”

NEW: President of the European Union commission says they want to start buying oil from the United States and not Russia.

Trump wins the election and the world falls in line. Remarkable.

“We still get a lot of [liquified natural gas] from Russia, and why not replace it by… pic.twitter.com/E6OwSN6UrR

— Collin Rugg (@CollinRugg) November 8, 2024

The US is already Europe’s largest provider of LNG, but imports from Russia remain number two. Brussels continues to search for new ways to curb Moscow’s energy flows into the continent, which will only suggest US energy supplies will be the eventual replacement. We commented earlier this week on the latest fiasco with Russian NatGas pumped into Ukraine, then Slovakia, which is set to be halted at the first of the year. 

Final Countdown: Slovakia Warns Of “Economic Damage” As Ukraine NatGas Transit Nears End https://t.co/YIMOHCx7uZ

— zerohedge (@zerohedge) December 18, 2024

However, Bloomberg pointed out, “The US doesn’t have much more capacity to increase shipments. And since LNG is sold through long-term contracts, adding shipments to Europe would require original buyers of the gas to agree to divert its shipments to Europe — but that wouldn’t boost the amount being exported by the US,” adding, “Over the longer term, more capacity will come on line with dozens of projects in the US currently in the works.” 

Authored by Andrew Chen via The Epoch Times,

Nearly half of Canadian manufacturers may freeze hiring or lay off workers if U.S. President-elect Donald Trump imposes 25 percent tariffs on all Canadian goods.

A survey of 300 manufacturers found that 48 percent are considering these moves in response to the proposed tariffs, according to data released Dec. 19 by Canadian Manufacturers and Exporters (CME).

Additionally, 46 percent are considering postponing or cancelling planned capital investments, while 49 percent say they may shift some production to the U.S. if the tariffs are implemented.

“Tariffs will endanger nearly $600 billion in exports to our largest trading partner, two-thirds of which are manufactured goods,” CME president and CEO Dennis Darby said in a press release.

“These findings show why we need an urgent and coordinated response from governments to protect manufacturing businesses, workers, and families.”

Failure to do so “will be devastating for our economy,” Darby said.

Trump threatened the 25 percent tariff against Canada, as well as Mexico, in a series of Truth Social posts on Nov. 25, saying the tariffs will come into effect unless the two countries address the issue of illegal immigration and illicit drugs entering the United States through their borders.

On Dec. 17, the federal government announced it would spend $1.3 billion over six years to bolster border security. The funding will support law enforcement agencies with the use of artificial intelligence and imaging tools to detect and intercept fentanyl and its precursor chemicals entering Canada.

The Canada Border Services Agency will train and deploy new canine teams to assist in drug interception, and Health Canada will establish a Canadian Drug Profiling Centre to support 2,000 investigations annually and expand capacity at regional labs.

The investment will also provide new tools for the RCMP, including a new Aerial Intelligence Task Force comprised of helicopters, drones, and mobile surveillance towers. Counter-drone technology will support RCMP officers and provide 24/7 surveillance between ports of entry, according to the government’s announcement.

Ottawa will improve information sharing with the United States and between different levels of government and law enforcement. This will help officials respond more effectively to illegal border crossings by enhancing real-time intelligence, tracking migration trends, and improving coordination.

Authored by James Gorrie via The Epoch Times,

After taking a six-month break from an 18-month gold-buying spree, the People’s Bank of China (PBOC) resumed its policy of large gold purchases in November.

On Oct. 31, gold reached a record price of $2,790.15 an ounce. Although it fell 5 percent last month, it remains about 28 percent higher for the year.

What’s behind China’s gold fever?

Gold Value Fluctuations Don’t Matter to Beijing

Although the value of the PBOC’s gold portfolio is subject to fluctuating market prices, China’s central bank seems to be more concerned about acquiring as much gold as it can and less concerned about changing valuations. In fact, according to Bloomberg, by the end of August of this year, the PBOC’s gold holdings reached 2,165 tons or about 4 percent of its total foreign reserves. Not surprisingly, in 2023, China led the world’s financial institutions in gold acquisitions and may do so in 2025.

Domestic Demand: A Partial Cause of China’s Gold Fever

There are several explanations for why Beijing is pursuing a bold gold policy. Certainly, gold has long been a safe haven for investors, especially during economic uncertainty. Currently, several economic factors are projecting uncertainty worldwide, including in China, which is driving demand. The ongoing property sector meltdown, an unreliable stock market, lower consumer spending, missed GDP growth targets, and the falling value of the yuan are just a few—and the people know this.

What’s more, there aren’t many good places for the Chinese to invest at home, and capital controls make it difficult for most Chinese to take advantage of foreign opportunities. Given gold’s history as a reliable store of value, it’s attractive to all levels of investors, resulting in rising domestic demand. For all these reasons, the PBOC is seeking to meet the Chinese public’s demand for gold.

Global Events Drive Uncertainty

But Beijing’s gold-forward strategy involves more than simply meeting domestic demand. Conflicts in Ukraine and the Middle East, including the evolving situation in Syria, have led to a far less predictable international order. Today, the world is leaning more toward uncertainty than predictability, which typically leads to a rise in the demand for gold.

This has undoubtedly been a factor in driving gold prices higher, but it hasn’t had much impact on China’s acquisition plans, which have been in place for the past several years.

The Strategic Elements of Gold Acquisition

Global instability aside, the strategic goal behind Beijing’s gold policy is, at minimum, to reduce its reliance on the U.S. dollar. That would include protecting itself as much as possible from the punitive measures—such as trade sanctions, restrictions, and tariffs—that Washington often imposes upon its economic or geopolitical adversaries. Both China and Russia have been and are subject to sanctions and tariffs by the United States.

Even though the U.S. dollar’s prominence in the world has diminished in recent years, 64 percent of global debt, 54 percent of world trade, and about 59 percent of global foreign currency reserves are denominated in U.S. dollars—the nearest competitor is the euro, at 20 percent.

The Chinese Communist Party (CCP) is correct to assume that more punitive economic policies from Washington will negatively affect China. These concerns have become especially acute, with President-elect Donald Trump set to return to the White House in January 2025. Trump has pledged to raise tariffs on Chinese goods and services and even add sanctions based on China’s behavior on trade and other factors.

A Gold-Backed Yuan to Compete With the Dollar?

However, Trump isn’t the key factor in Beijing’s gold policy. The CCP’s long-term strategy is to replace the United States as a global hegemon. To do so, it must replace the dollar with the yuan, regardless of who occupies the White House. China’s gold acquisitions play a major role in that ambitious plan. The thinking is that a gold-backed yuan would eventually make it more desirable than it is today.

That’s precisely why Beijing steadily replaced its U.S. dollar Treasury bond holdings with gold well before the 2024 election cycle. Shrinking China’s U.S. bond portfolio is the other half of Beijing’s dollar replacement strategy. Selling large amounts of bonds may lower market demand and encourage other nations to do the same.

To put it in perspective, in early 2022, China’s U.S. Treasury bond portfolio exceeded $1 trillion. By May 2024, it had decreased to $768.30 billion. That trend is likely to continue. At some point, China hopes that it will be able to shore up the value of the yuan to at least compete with the dollar on the world stage.

A Gold-Backed BRICS Currency to Counter Trump’s Policies?

As China continues to acquire gold, it accelerates its plan for de-dollarization. As a founding member of the BRICS (Brazil, Russia, India, China, and South Africa) currency, China is the largest economic power in the group, which is significant. The BRICS currency agreement was formed to compete with the dollar in international trade via bilateral trade agreements between members that excluded the use of the dollar.

With the recent expansion of the BRICS group (BRICS-Plus), which now includes Iran, Egypt, Ethiopia, and the United Arab Emirates (UAE), their combined economies exceed 50 percent of the world’s GDP. Saudi Arabia received an invitation to join BRICS but has not yet formally done so. By contrast, the U.S. economy is about 27 percent of global GDP. What’s more, the total gold holdings of BRICS-Plus members is nearly 17 percent of all the gold in central banks worldwide. It’s also worth noting that along with China, Russia and India have also been steadily adding to their gold reserves over the years.

Clearly, the decision to expand BRICS membership gives the group much more influence globally, with greater advantages in economic power, gold reserves, market reach, and others.

Is it not reasonable to speculate that a gold-backed BRICS-Plus currency may be introduced to the world before too long—perhaps even as a response to the incoming Trump administration?

If there’s a better explanation for China’s massive appetite for gold, what might it be?

*  *  *

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Here we go…

After yesterday’s disastrous failed vote on a pared down spending package, speaker Mike Johnson is set to roll out a revised plan for another bite at the apple before tonight’s deadline for a federal government shutdown.

Except… according to Rep. Anna Paula Luna (R-FL) who just came out of Johnson’s office, the next revision – to be voted on at 10am ET – will be “something very similar to yesterday,” and that Republicans will not negotiate with Democrats, according to Jake Sherman.

Which means a shutdown is imminent unless they can pull a rabbit out of a hat.

ANNA PAULINA LUNA just came out of the speakers office and said there will be a vote on “something very similar to yesterday.”

She said Rs will not negotiate with Dems.

She also said vote at 10, which I’ve been told is an ambitious internal leadership goal not meant to be…

— Jake Sherman (@JakeSherman) December 20, 2024

As Punchbowl News notes, Johnson is desperate – reportedly saying on Thursday that “If anyone else can get 218 votes, God bless them,” according to lawmakers present.

Johnson’s Trump-endorsed Plan-B-funding-and-debt-limit bill failed miserably on the House floor Thursday night. Thirty-eight Republicans ignored Trump and Johnson’s entreaties and voted against the bill, showing the limits of both men’s power in the House.

All but two House Democrats voted no. Rep. Marcy Kaptur (D-Ohio) voted present.

After the vote failed, Johnson, who was mobbed by reporters just feet from the House floor, tried to stay positive. “We will regroup and we will come up with another solution so stay tuned,” Johnson said.

Of course, nobody seems to want to try the obvious solution – separate votes, as rep Thomas Massie (R-KY) pointed out Thursday afternoon.

This isn’t complicated.

Separate the bills and vote on them individually.

one vote on the clean CR

one vote on the debt limit

one vote on disaster relief

one vote on farm bailouts

Radical right? Individual bills for each issue.

— Thomas Massie (@RepThomasMassie) December 20, 2024

Meanwhile, House Majority Leader Steve Scalise – who disagreed with Johnson’s decision for a short-term CR, said “they’re looking at some other options.”

“What exactly is in or out hasn’t been decided, but you start with keeping the government open,” Scalise told reporters.

President-elect Trump chimed in on Friday as well, posting on Truth Social: “If there is goign to be a shutdown of government, let it begin now, under the Biden Administration, not after January 20th, under TRUMP.”

Polymarket participants are giving a shutdown a 61% chance as of this writing. Let’s see where the below widget goes throughout the day.

Punchbowl has some ideas on the path forward.

1) Try the bill that failed — again. Plan B could become Plan C. Republicans could schedule a vote on the CR package that failed on Thursday again. That’s clearly the package Trump wants, after his “SUCCESS in Washington” tweet.

2) A negotiated settlement. Although Trump might not like it, Democrats have a price. Johnson can get together with House Minority Leader Hakeem Jeffries and figure out what Democrats need to support a bill to fund the government past tonight.

The problem for Johnson is this runs the risk of both dividing the House Republican Conference and angering Trump by trying to again cut a deal with Jeffries. Democrats have to be convinced Johnson won’t renege again, as well as being able to deliver enough votes. Sources close to Jeffries say they can deliver the votes. The question is can Johnson?

3) Drop the debt-limit increase. If Johnson were to drop the debt-limit increase from Thursday’s bill, that might be an attractive option for Republicans and even some Democrats. Remember, that’s a three-month CR with disaster funding and an extension of the farm bill. With a shutdown just hours away, this isn’t a bad move.

Plus, many Republicans are truly opposed to Trump’s call to extend the debt limit now. Congress is six months ahead of any debt-limit deadline. Also, Trump also dropped this demand into lawmakers’ laps two days before a shutdown.

4) A short-term CR. There was some talk inside the GOP leadership and among rank-and-file members about a short-term CR to fund federal agencies until early or mid-January. But this wouldn’t change the current reality: Johnson has a very small majority, he has to deal with a volatile incoming president, face down an emboldened mega-billionaire with a social media platform and has a generally uncooperative House Republican Conference.

Stay tuned for updates…

Authored by Steve Watson via Modernity.news,

The level of batshittery on The View just got ratcheted up several more notches as the cackling witches suggested that Elon Musk is conspiring with JD Vance to get rid of Trump.

Host Whoopi Goldberg ranted “Who is in charge? Because I’ve been saying it for a while. I’ve been saying that I think Elon Musk believes he’s President. I do.”

“Well, you can call him Vice President,” Joy Behar interjected, prompting Goldberg to continue ranting “I’ve called him Vice President. I called him President because I don’t know what JD is doing. I hardly ever said. I don’t remember the last time we even talked about JD.”

They’re not even in office yet. What is he supposed to be doing?

“He’s planning the presidency when he got to get rid of Trump,” Behar claimed out of nowhere.

“So you think it’s Musk, Vance?” Goldberg asked her, to which she responded “Possible.”

Goldberg then offered some advice to Trump, “Stay away from the stairways. People put their leg out to trip people down the stairs. Watch out.”

ABC News moderators Whoopi Goldberg and Joy Behar claim Elon Musk and JD Vance are planning to kill Trump and usurp control of the government together as Musk/Vance.
“[Trump] stay away from the stairways.” – Whoopi pic.twitter.com/bMRmOSwdrk

— Nicholas Fondacaro (@NickFondacaro) December 19, 2024

When they returned for their next 4 minute segment after the 50th commercial break, Goldberg had obviously been told to tone it down and backtrack as she stated “I need to clean something up because my cat lays in wait for me on my stairs all the time. And that’s what I was thinking of. I wasn’t trying to indicate that they were actually standing there with their legs out hoping he would trip.”

“No, nobody wants anything done to the President,” Sunny Hostin chimed in.

Goldberg continued, “No, it was light-hearted, and it’s the holidays. Come on. My goodness. You did not mean that anybody should hurt the President. No.”

She then added, “Okay. You think about this show, there’s no way not to step in poop. There’s no way to do it. There’s no way not to do it. For all of you who are waiting and saying, ‘Oh, my God, listen to what she said,’ I got a cat who does it to me every day. That’s what sparked.”

After a commercial break, Whoopi tries to downplay her assassination comments about Trump by claiming she was thinking about her cat: “My cat lays in wait for me on my stairs all the time and that’s what I was referring [to].”
“No one wants anything done to the President.” Hostin pic.twitter.com/4qUc0thEYT

— Nicholas Fondacaro (@NickFondacaro) December 19, 2024

There’s no way for you not to step in poop Whoopi, because you’re putting out the most batshit crazy nonsense every day and getting called out for it.

It can only be a matter of time before this show is yanked off the air for good.

* * *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

The Fed’s favorite (until it starts rising) inflation indicator – Core PCE – printed cooler than expected for November (+0.1% MoM vs +0.2% MoM exp) which held it steady at +2.8% YoY (below the expected 2.9%) – tied for the highest since April…

Source: Bloomberg

However, Headline PCE rose to +2.4% from +2.3% – its highest since July…

Durable (and non-durable) Goods Deflation has all but evaporated now…

The so-called SuperCore – Core Services Ex-Shelter PCE – rose 0.16% MoM leaving the index up 3.51% YoY (steady at its highest since April)…

Finally, both the cyclical and acyclical components of inflation are on the rise once again (the latter being out of the control of The Fed implicitly)…

Source: Bloomberg

Not a good sign and perhaps The SF Fed’s report is what prompted Powell’s pivot to the hawkish dark-side. Or is this what he realy fears?

Source: Bloomberg

Of course, we all know who will get the blame if that replay occurs!

US equity futures and global markets are broadly risk-off to end a turbulent week after the US House rejected a temporary funding plan backed by Donald Trump (38 republicans voted against the bill) which would have avoided a gov’t shutdown that otherwise will start a midnight, with trade war concerns mounting (Trump said “I told the European Union that they must make up their tremendous deficit with the US by the large scale purchase of our oil and gas. Otherwise it is tariffs all the way!!!”). Expect elevated volumes today due to the last option expirty/quarterly rebalance of the year. As of 8:00am ET, S&P futures are down 0.8%, Nasdaq futs tumble 1.4%, with technology stalwarts such as Tesla and Nvidia sliding in early trading as momentum reversed with a bang. Europe’s Stoxx 600 weakened 1.7% as Novo Nordisk A/S fell by the most on record on the back of disappointing data from a treatment trial; the rest of the world not much better: FTSE -95bps, DAX -1.3%, CAC -1.05%, Nikkei-29bps, Hang Seng -16bps, Shanghai -6bps. 10Y treasury yields dipped a little after surging in the past three days, down 2bps to 4.54%, with the Bloomberg US dollar index also easing back a bit as both the yen and euro gain. Bitcoin tumbled amid the riskoff mood, sliding as much as 8% to a low of $92K and dragging down MicroStrategy Inc. and other crypto-related companies in premarket trading. Oil reversed earlier losses with gold also rising on expectations of aggressive Chinese stimulus. Today’s economic calendar will see the November core PCE, personal income and spending as well as the latest UMich data.

In premarket trading, FedEx rose 6% after the company said it plans to spin off its freight division into a separate publicly traded company in a deal that will streamline the parcel giant.  Eli Lilly jumped 5% after competitor Novo Nordisk A/S gave data from a highly anticipated trial of its experimental weight loss drug, CagriSema, that fell short of expectations. Nike meanwhile tumbled 7% as management expected revenue in the current quarter to decline in the low double digits, a steeper drop than the 7.7% decline posted last quarter. Here are the other notable premarket movers:

• Clearwater Paper Corp. (CLW) rises 14% as Brazil’s Suzano SA is exploring an offer for the company, according to people with knowledge of the matter.
• Coinbase (COIN) drops 6%, down along with other stocks that have exposure to cryptocurrencies, as interest-rate caution from the Fed this week dampens sentiment on speculative investments. Robinhood (HOOD) -6%, MicroStrategy (MSTR)  -6%
• Humacyte (HUMA) jumps 56% after the Food and Drug Administration granted full approval of its bio-engineered human tissue product for adults with arterial injury.
• Occidental Petroleum (OXY) rises 2% after Warren Buffett’s Berkshire Hathaway increased its stake in the energy company.
• US Steel (X) drops 6% after the steel producer warned its fourth-quarter earnings will be lower than anticipated as steel prices remain depressed in the US and as the demand environment in Europe is weak.

The S&P 500 was heading for its biggest weekly drop since at least September, with the index down 3% on the week after the Fed’s political hawkish pivot sparked a global selloff.

Stock market volatility spiked in recent days as a hawkish pivot by the Federal Reserve made traders question whether this year’s tech-fueled rally could extend further in a higher rates environment, despite a resilient US economy.  Friday’s personal consumption expenditures data for November, the Fed’s preferred measure of underlying inflation, will offer further clues on 2025’s rate path. For now, the swaps market is implying between one and two quarter-point reductions for next year, a decrease from a month ago when two cuts were fully priced.

Adding to the nerves is Friday’s US options expiration, which has historically stoked turbulence, and offers a final hurdle to end-of-year calm. The quarterly “triple-witching” will see a whopping $6.5 trillion worth of options tied to individual stocks, indexes and exchange-traded funds fall off the board, this year’s largest. The opex will also collapse the dealer gamma, unclenching the market, and allowing for much wider volatility in the coming (very illiquid) days.

The fact that CTAs are also sellers in all scenarios (according to Goldman) isn’t helping the already downbeat mood.

1 Week:

• Flat Tape = $10.2bn for SALE
• Up 2Stdv = $7bn for SALE
• Down 2.5Stdv = $14.5bn for SALE

1 Month:

• Flat Tape = $24bn for SALE
• Up 2Stdv = $2.5bn for SALE
• Down 2.5Stdv = $60bn for SALE

Concerns are also growing about the implications of the Republican-led House rejecting a temporary funding plan backed by President-elect Donald Trump on Thursday, with a US government shutdown looming in less than 24 hours.

The development can “inevitably increase the market volatility in the short term, especially after Fed’s hawkish pivot two days ago,” Jasmine Duan, a senior investment strategist at RBC Wealth Management Asia, told Bloomberg TV. Investors face risks from “potentially more sticky inflation and also the debt issue in the US,” she said.

“There’s plenty of room for volatility to kick in and a selloff to take place,” said Neil Birrell, chief investment officer at Premier Miton Investors. “There’s going to be less liquidity as well. You’ll see a rapid pace of moves taking place as people adjust their portfolios for the year-end and that could affect all asset classes.”

European stocks also slumped with all sectors dropping; banks, miners and construction are the worst-performing sectors. Euro Stoxx 50 slumps 1.2% as Novo Nordisk A/S fell by the most on record on the back of disappointing data from a treatment trial. FTSE 100 outperforms peers, dropping 0.5%. Here are some of the biggest movers on Friday:

• Fraport gains as much as 8% as JPMorgan upgraded the Frankfurt airport operator to overweight, following its announcement that it has closed a four-year deal with airlines on fees.
• Sobi gains as much as 3.1%, the most in almost a month, after the Swedish biotechnology firm saw its rating upgraded to buy from hold at DNB, with the broker saying the company is “on course for a strong 4Q.”
• Belships rises 27%. Blue Northern, an SPV, will start a recommended voluntary cash tender offer of NOK20.50 per share to acquire all issued and outstanding shares in Belships, according to a statement after market close Thursday.
• RAI Way shares rise as much as 4.1% in Milan trading after the owners of the state-backed TV operator and its local rival Ei Towers SpA signed a memorandum to explore a possible merger.
• Tomra gains as much as 7.3% after Pareto Securities double-upgraded the Norwegian recycling-systems manufacturer, citing improving long-term prospects in Europe.
• Zealand Pharma shares drop as much as 11% after the FDA wrote a letter recommending an additional clinical trial for the Danish drugmaker’s experimental medicine glepaglutide for short bowel syndrome.
• Hornbach shares fall as much as 13% after the German home store operator’s third-quarter results showed the impact of lower sales, especially in Germany, and salary increases.
• Idorsia shares plunge as much as 47%, the most on record, after the Swiss pharmaceuticals producer said it’s considering options to extend its operational cash runway after the signing of a planned global rights deal for aprocitentan won’t be achieved in 2024.
• TeamViewer shares fall as much as 4.6% on Friday to the lowest in over two years, as Goldman Sachs downgraded its recommendation on the stock to neutral from buy, saying the software firm’s recent acquisition of 1E makes its outlook for shareholder returns less attractive.

Asian stocks fell for a sixth day, heading for their longest losing streak in eight months, as traders continued to mull the prospect of a more hawkish Federal Reserve. The MSCI Asia Pacific Index dropped as much as 0.7%, with TSMC and Alibaba Group among the biggest contributors to its decline. Tech-heavy benchmarks in South Korea and Taiwan were among the region’s worst performers, declining more than 1% each. The after-effects of this week’s relatively hawkish Fed meeting continued to weigh on Asian stocks, with the regional benchmark less than 1% away from falling into a technical correction. Traders awaited US inflation data due later Friday for further clues on the central bank’s policy outlook.

In FX, a Bloomberg gauge for the dollar was on course for its best week in a month despite ticking down on Friday.  AUD and SEK are the weakest performers in G-10 FX; JPY and CHF outperform. The yen erased losses after Japan’s key inflation gauge strengthened for the first time in three months and Finance Minister Katsunobu Kato warned Japan would take appropriate action if there are excessive moves in the yen. BRL leads gains in EMFX, rising 2.5% with Brazil’s congress inching closer to delivering a diluted spending plan. A key gauge of Asian shares dropped for a sixth day.

In rates, treasuries are richer across the curve with gains on the day led by the front- and belly, keeping 2s10s and 5s30s spread near Thursday’s session highs.  Treasury yields richer by 4bp to 1bp across the curve with front-end led gains steepening 2s10s spread by 1.5bp on the day and 5s30s by 3.5bp; 10-year yields trade around 4.54%, richer by 2bp on the day with bunds lagging by 1.5bp in the sector and gilts slightly outperforming. Similar bull-steepening trends seen across core European rates over the early London session while S&P futures, European stocks trade lower in a risk-off backdrop. Treasury auctions resume Dec. 23 with $69b 2-year note sale, followed by $70b 5-year and $44b 7-year note sales Dec. 24 and Dec. 26

In commodities, WTI drifts 1% lower to trade near $68.68. Most base metals are in the green. Spot gold rises roughly $10 to trade near $2,604/oz. Bitcoin falls below $95,000.

Today’s US economic calendar includes November personal income/spending, PCE price index (8:30am), December University of Michigan sentiment (10am) and Kansas City Fed services index (11am). The Fed speaker schedule includes Daly due to appear on Bloomberg TV (7:30am) and Williams on CNBC (8:30am)

Market Snapshot

• S&P 500 futures down 0.7% to 5,826.50
• STOXX Europe 600 down 1.0% to 501.63
• MXAP down 0.8% to 179.14
• MXAPJ down 1.2% to 565.83
• Nikkei down 0.3% to 38,701.90
• Topix down 0.4% to 2,701.99
• Hang Seng Index down 0.2% to 19,720.70
• Shanghai Composite little changed at 3,368.07
• Sensex down 1.5% to 78,039.19
• Australia S&P/ASX 200 down 1.2% to 8,066.96
• Kospi down 1.3% to 2,404.15
• German 10Y yield little changed at 2.31%
• Euro up 0.2% to $1.0383
• Brent Futures down 1.0% to $72.17/bbl
• Gold spot up 0.4% to $2,603.73
• US Dollar Index down 0.17% to 108.22

Top Overnight News

• China’s one-year bond yields plunged 17 bps to the lowest since 2003, just a few hours after sliding below the psychological barrier of 1%. The stars seem to be aligned for this year’s rally to extend well into 2025. BBG
• Japan’s national CPI for Nov accelerates vs. Oct, with the headline jumping to +2.9% (up from +2.3% in Oct and inline w/the Street) and ex-food/energy climbing to +2.4% (up from +2.3% in Oct and inline w/the Street). WSJ
• Russia’s central bank unexpectedly held rates at 21%, saying monetary conditions tightened and inflation expectations continue to rise. BBG
• UK retail sales for Nov rebounded from Oct, but still fell short of the consensus forecast at +0.3% M/M ex-fuel (vs. -0.9% in Oct and vs. the Street consensus of +0.5%). WSJ
• US president-elect Donald Trump has warned the EU that it must commit to buying “large scale” amounts of US oil and gas or face tariffs. The EU has spent the past month increasing purchases of US goods such as liquified natural gas and agricultural products as means to potentially avoid tariffs from the US. FT
• Brazil’s senators are set to vote on a bill today that further dilutes a package of spending cuts meant to buoy markets. The central bank will step in again to support the real with a FX credit line auction of as much as $4 billion and a spot auction of up to $3 billion. BBG
• The Republican-led House rejected a temporary funding plan backed by Donald Trump to avoid a government shutdown that’ll otherwise happen at midnight. Trump wants a deal that sets March 14 as the new funding deadline and either raises or eliminates the debt ceiling. Thirty-eight GOP lawmakers and almost all Democrats voted against the package. BBG
• NKE (Nike) -4% in the pre as forward guidance/commentary given on call last night came in well below consensus and overshadowed the strong quarter that originally drove stock +10% to $85 post press release.
• AVGO (Broadcom) CEO Hock Tan says the AI spending boom will continue until the end of the decade (“they are investing full-tilt”) as customers seek out the company’s chips as a cheaper alternative to Nvidia. FT

A more detailed look at global markets courtesy of Newsquawk

APAC stocks eventually traded mixed following a mostly lower open after the lead from Wall Street as markets digest a slew of central bank decisions whilst still feeling the hangover from the Fed. ASX 200 was pressured by heavyweight financial, materials, and healthcare sectors, whilst Utilities and IT bucked the trend and posted mild gains. Nikkei 225 was briefly supported by the recent JPY weakness, although later faltered as JPY eventually strengthened following hotter-than-expected CPI and currency jawboning by Japanese officials. Hang Seng and Shanghai Comp both opened lower and trimmed losses to later trade, with Chinese markets unfazed as the PBoC maintained its LPRs.

Top Asian News

• Japan cuts view on corporate profits for the first time since March 2023; says economy is recovering moderately.
• China intends to cut tax evasion at online platforms, according to Xinhua.
• PBoC maintained 1yr LPR at 3.10% and 5yr LPR at 3.60% as expected.
• Japan Finance Minister Kato said no comment on FX levels; recently seeing one-sided, sharp moves; will take appropriate action against excessive moves; concerned about recent FX moves, including those driven by speculators, according to Reuters Kato added that it is important for currencies to move in a stable manner reflecting fundamentals.
• Japan’s top currency diplomat Mimura said gravely concerned about forex moves, and will take appropriate action against excessive forex moves, alarmed including over speculative moves, according to Reuters.
• South Korea to relax FX regulations to improve liquidity conditions, according to the finance ministry.

European bourses began the morning entirely in the red, and continued to proceed lower as the session progressed; as it stands, indices generally reside at worst levels. As it stands, all European sectors find themselves in the red; in-fitting with sentiment. Whilst still in the red, Real Estate fares the best vs peers. Banks are by far the clear underperformer, weighed on by Deutsche Bank, which expects a Q4 EUR 300mln hit due to its Polish subsidiary litigation. US equity futures are in negative territory and drifting lower as the session progresses, following the glum mood seen in European trade. Foxconn (2354 TT) to pause pursuit of Nissan (7201 JT) as Honda (7267 JT) deal talks unfold, via Bloomberg citing sources

Top European News

• UK Chancellor Reeves is posed to visit China in January to revive high-level economic and financial talks, according to Reuters sources.
• NIER sees Swedish GDP for 2025 +1.2%. See the Riksbank rate averaging 1.5% in 2025 and 1.5% in 2026

FX

• USD is giving back some of its gains which saw DXY top the 11th November 2022 peak overnight (108.44) to make a 108.48 high. Today will see a slew of Fed speakers on the wires who can help further explain the announcement. Williams, Daly, Hammack are all due on deck with particular interest on the latter given her hawkish dissent at the meeting.
• EUR is edging out slight gains vs. the USD but remains on a 1.03 handle after printing a fresh low for the month earlier @ 1.0344 in the wake of comments from US President-elect Trump cautioning that the EU “must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!”. It is worth noting that there is some huge option activity in EUR/USD for today’s NY cut, detailed below.
• JPY is attempting to undo some of the damage seen over the past few sessions as a hawkish Fed cut and lack of a hike from the BoJ has driven the pair from a 153.32 base on Wednesday to a multi-month high overnight at 157.92. Some respite has been granted following hotter-than-expected Japanese CPI overnight and currency jawboning by Japanese officials, who expressed concerns over recent JPY moves.
• GBP flat vs. the USD and lagging peers following soft UK retail sales data for November in what has been a generally busy week for UK data as well as yesterday’s dovish hold by the BoE. Cable has slipped onto a 1.24 handle for the first time since 22nd November with a current session trough at 1.2476.
• AUD unable to make much headway vs. the broadly softer USD in what has been a bruising week for AUD/USD after the pair made a fresh YTD low yesterday at 0.6200 to hit its lowest level since October 2022. Similar price action for NZD/USD which hit a fresh YTD low yesterday at 0.5609 to trade at its lowest level since October 2022.
• PBoC set USD/CNY mid-point at 7.1901 vs exp. 7.3086 (prev. 7.1911)
• Brazil called an FX credit line auction of up to USD 4bln on December 20th, according to Bloomberg.

USTs

• USTs are modestly firmer but yet to significantly deviate from the unchanged mark in 108-19+ to 108-26+ parameters. Docket ahead features monthly PCE data before the docket turns to Central Bank speak with Fed’s Williams, Daly & Hammack scheduled; the latter is set to explain her dissent. The yield curve continues to steepen though action is modest and a function of the short-end continuing to pull back from post-Fed highs.
• Bunds are incrementally firmer, but similarly to USTs are yet to deviate lastingly from the unchanged mark but have printed a slightly more expansive 133.81 to 134.10 range. Bunds did come under modest pressure on a much hotter than expected German PPI release; but did since pare alongside peers.
• Gilts opened higher by a single tick before slipping to a 92.18 trough and then paring back to unchanged. Since, action has been very limited and choppy in 92.18-48 parameters. Before the open, Retail Sales came in softer than expected but still posted a recovery from the prior.

Commodities

• WTI and Brent are softer, continuing to falter after Thursday’s reports that the G7 could adjust the Russian energy price cap with pressure also stemming from the downbeat risk tone. Brent’Feb 25 currently reside near lows at USD 72.20/bbl.
• Gold is firmer and holding around the USD 2.6k/oz mark in a thin range with catalysts for the metal light and after trading flat overnight. XAU is holding in proximity to the 100-DMA at USD 2606/oz.
• 3M LME Copper is defying the risk tone and holding modestly in the green, though still yet to test USD 9k/handle yet.
• India’s finished steel imports from China reach all-time high during April-November, according to Govt data.
• German Parliament has passed its energy law: will accommodate the waiver of internal gas storage levy at intra-EU border points and virtual trading hubs. This entails the gas levy payable to the operator Trading Hub Europe to apply to domestic customers only from Jan 1st 2025.
• Russia’s Kremlin says will act to counter the possible new G7 oil sanctions; will act to minimise any consequences and protect Russian companies, measures will backfire on those who take them.

Geopolitics

• “Israel’s Channel 14 on security officials: Israel is preparing for a new attack against the Houthis in Yemen”, according to Sky News Arabia.
• “Israel’s Channel 13 on officials: optimism remains high that a deal with Hamas is imminent.”, according to Sky News Arabia
• “7 strong explosions are heard in the Ukrainian capital Kiev”, according to Sky News Arabia; Ukraine air defence repelling an attack on Kyiv, according to official cited by Reuters.
• Russia fired a series of Kinjal hypersonic missiles on the capital Kiev, according to Sky News Arabia.

US event calendar

• 08:30: Nov. Personal Income, est. 0.4%, prior 0.6%
• 08:30: Nov. PCE Price Index MoM, est. 0.2%, prior 0.2%
• 08:30: Nov. Core PCE Price Index YoY, est. 2.9%, prior 2.8%
• 08:30: Nov. Core PCE Price Index MoM, est. 0.2%, prior 0.3%
• 08:30: Nov. PCE Price Index YoY, est. 2.5%, prior 2.3%
• 08:30: Nov. Real Personal Spending, est. 0.3%, prior 0.1%
• 08:30: Nov. Personal Spending, est. 0.5%, prior 0.4%
• 10:00: Dec. U. of Mich. 5-10 Yr Inflation, est. 3.1%, prior 3.1%
• 10:00: Dec. U. of Mich. 1 Yr Inflation, est. 2.9%, prior 2.9%
• 10:00: Dec. U. of Mich. Expectations, est. 71.9, prior 71.6
• 10:00: Dec. U. of Mich. Current Conditions, est. 77.1, prior 77.7
• 10:00: Dec. U. of Mich. Sentiment, est. 74.2, prior 74.0
• 11:00: Dec. Kansas City Fed Services Activ, prior 9

DB’s Jim Reid concludes the overnight wrap

Welcome to the last EMR of 2024. Happy holidays from Henry, Peter, Asim and myself. I say this every year but a huge thanks for reading and interacting with us this year. Thanks for voting in the II survey again where we found out last week we had another couple of 1st places in the global analyst awards. It really means a lot that you took the time to vote, so many thanks. I’ll be off skiing as of Monday but before I go it’s become a tradition to list my favourite TV shows of the year which I’ll do at the end. Regular readers know that if I’m not travelling I try to escape to an hour of TV a night with my wife in between edits of the EMR. I hope you’ve enjoyed some of these too.

Before unveiling the rather salacious number one entry on the list, we have the small matter of a nervy last full week of the year to comment on with a possible US government shutdown dominating proceedings. For those wanting a quiet run up to Xmas, the good news is that there hasn’t been any real follow-through to the Fed-induced slump on Wednesday. The bad news is that an initial recovery in markets struggled to gain traction yesterday, with the S&P 500 (-0.09%) posting a joint record 14th consecutive day of decliners outnumbering advancers. The data stretches back 100 years so this is some stat. Futures on the S&P 500 are down another -0.36% this morning, so will we break the record today?

There was also scar tissue in bond markets, with 10yr (+4.8bps) and 30yr (+6.0bps) Treasury yields reaching their highest levels since May. The one area where there was a sense that the moves may have been overdone was at the front end, where the rate priced in by the December 2025 meeting was down -4.5bps on the day to 3.96%. For all the speculation about the Fed returning to hikes, it’s worth remembering they still cut rates this week and signalled more ahead, so the easing bias remains, even if it’s not as aggressive as it was. Indeed, investors are still pricing in 37bps of cuts next year, which isn’t too far off the Fed’s median dot at 50bps. So for DB to be correct that there are no cuts next year, we will need the Fed and the market to continue to change their minds.

But when it comes to the next 24 hours, the big question now is whether a US government shutdown is about to happen. The situation has moved quickly since Wednesday, when Elon Musk fiercely criticised the stopgap spending bill negotiated in Congress, with Trump and JD Vance then coming out against it later that day. Yesterday saw House Republicans put forward an alternative proposal that would fund the government through March and raise the debt limit for two years. The debt limit issue had been pushed by Trump who even said he’d be open to abolishing the debt limit altogether, saying he “would support that entirely”. However, the latest bill was voted down by 235 votes to 174 in the House last night, with 38 Republicans joining virtually all Democrats in voting against it. This leaves the Republican House leadership searching for a Plan C with less than 24 hours to go before the shutdown deadline. And as it stands, Polymarket are currently pricing in a 64% chance of a shutdown before year-end.

Whilst all that was happening, we did get some very positive US data yesterday, which helped to reassure investors about the near-term outlook and encouraged a huge curve steepening. That included the weekly initial jobless claims, which fell back to 220k in the week ending December 14 (vs. 230k expected). In addition, the Q3 GDP data was revised higher, coming in at an annualised pace of +3.1% (vs. +2.8% before) and with the PCE inflation for Q3 revised up from +2.1% to 2.2%. The stronger data encouraged a steepening in rates with the 2s10s curve moving up +8.8bps to 24.1bps, which is its steepest closing level since June 2022, back when the Fed began to hike by 75bps per meeting. That came amidst a continued move higher for long-end Treasury yields, as both 10yr yields (+4.8bps to 4.56%) and 30yr yields (+6.0bps to 4.74%) rose to their highest levels since May. This was again driven by real yields, with the 10yr real yield on course to post its largest weekly increase since October 2023 (+21.6bps so far this week). Higher real yields also helped the dollar index (+0.35%) advance for the 9th time in 10 sessions, and up to its highest level since November 2022.

A more bullish narrative initially helped to boost US equities, with the S&P trading more than 1% higher early in the session. But this optimism faded as the day went on and the index was -0.09% lower by the close, building on its -2.95% slump the previous day. The moves were fairly muted across the major indices. The Magnificent 7 (+0.25%) edged higher but the NASDAQ (-0.10%) declined and the small-cap Russell 2000 (-0.45%) fell back to its lowest level since the US election.

Since I asked on Wednesday for a new moniker for the Mag-7 which may include fast rising Broadcom, I’ve had a wave of suggestions emailed through. Some of them great, some of them funny. However its hard to beat the “BAATMAAN” moniker that’s been quietly doing the rounds for several weeks now. I’ve no idea who first came up with it but well played to them. I’m not sure if our “The Innov-eightors” or “The Domin-eightors” will catch on.

Over in Europe, the main news yesterday came from the Bank of England, who struck a more dovish note than expected. The main decision wasn’t a surprise, keeping the policy rate at 4.75%. But the decision was only made by a 6-3 vote, with the minority preferring a 25bp cut. Moreover, the statement made clear that the path was still towards further easing, and that a “gradual approach to removing monetary policy restraint remained appropriate.” In turn, that meant yields on 10yr gilts were only up +2.0bps yesterday to 4.58%, which was a much smaller rise than for 10yr bunds (+5.8bps) and OATs (+6.9bps). And perhaps most fascinatingly, 30yr gilt yields (+5.1bps) reached their highest since 2002 at 5.11% and above where they were a couple of years back during the LDI crisis.

Elsewhere in Europe, markets were catching up to the Fed’s hawkish moves the previous day, which happened after the European close. That pushed the STOXX 600 to a sharp -1.51% loss, with similar moves for the DAX (-1.35%), the CAC 40 (-1.22%) and the FTSE MIB (-1.78%). There was a particular underperformance for Swedish assets after the Riksbank’s latest policy decision as well. They cut their policy rate by 25bps, in line with expectations. But they also signalled that easing was nearing its end, saying that if the outlook were unchanged, “the policy rate may be cut once again during the first half of 2025”, with the policy rate forecast showing no further cuts beyond that out to 2027. That backdrop saw the OMX Stockholm 30 Index fall -2.23%, which was the biggest decline for the major European indices, whilst Sweden’s 10yr government bond yield was up +10.6bps.

Overnight, there’s been a fairly mixed performance for the major equity indices. In South Korea, the KOSPI (-1.58%) has experienced sharp losses, along with Australia’s S&P/ASX 200 (-1.24%). However, Japanese equities have been broadly unchanged after the latest inflation data was mostly as expected. It showed headline CPI moving back up to +2.9% in November as expected, whilst core-core inflation was up to a 7-month high of +2.4%. So the Nikkei is holding steady this morning with a +0.03% gain. The main outperformer have been Chinese equities, with the CSI 300 up +0.27%, whilst the Shanghai Comp is up +0.54%. That also comes as China’s 1yr bond yield fell to 1% for the first time since 2009.

To the day ahead now, and data releases from the US include PCE inflation for November, along with the University of Michigan’s final consumer sentiment index for December. Over in Europe, we’ll get UK retail sales for November, and the European Commission’s preliminary consumer confidence reading for the Euro Area in December. Otherwise, central bank speakers include the Fed’s Daly.

See you on the other side. Happy holidays……