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Frontrunning: December 28

  • Crude Rally Lifts Commodity Currencies; Bonds Rise: Markets Wrap (BBG)
  • Kerry Plans Middle East Speech as Israel Moves to Ease Tension (BBG)
  • Japan Looks to Smooth Over Past as New Threats Arise (WSJ)
  • Israel backs off East Jerusalem settlements (Reuters)
  • House Flipping Makes Comeback as Home Prices Rise (WSJ)

Global Stocks Rise, Dow Flirts With 20,000 As London Reopens; Oil In Longest Winning Streak In 7 Years

Global markets continued their levitation with the UK returning from vacation, pushing the MSCI Asia Pacific Index higher for the first time in seven days, while oil headed for the longest winning streak in almost seven years ahead of the promised OPEC production cut which is set to begin in just days. The USDJPY rose for a second day, pushing US equity futures higher and the DJIA is once again teasing with the 20,000 mark.

China Rattles Sabre - Tests Prototype Fifth-Generation Stealth Fighter

As president-elect Trump plays Boeing and Lockheed off against each other, China flexed its military muscles once again - after sending its aircraft carrier Liaoning into the western Pacific - by testing the latest version of its fifth-generation stealth fighter, state media reported on Monday, as it tries to end the West’s monopoly on the world’s most advanced warplanes.

Trump Proves All Politicians Have A Price

Even the most forthright of politicians will prove a dastardly dealmaker if you scratch the surface hard enough. Trump’s laying bare the idea that not all politicians have a price. Don’t get me wrong: I also enjoy watching the Left lose its collective shit over Trump’s astounding election, but I still feel a great deal of glee watching congressional Republicans fumble all over one another, trying to stay in the good graces of the new president.

Iran Negotiated Boeing Plane Purchases At Half Price

"Boeing has announced that its IranAir contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50 percent of that amount," said Deputy Transport Minister Asghar Fakhrieh-Kashan, quoted by Iran's IRNA state news agency.

Trump Wins Again - Lockheed CEO Gives "Personal Commitment" To Cut F-35 Costs "Aggressively"

It appears the so-called 'Twitter-spanking' approach of president-elect Trump is working. First Carrier, then Ford, and now, following his earlier jab at Lockheed's F-35 costs by asking Boeing to price-out a comparable F-18, Lockheed Martin CEO Marillyn Hewson has reportedly given Trump her "personal commitment" to "aggressively" drive down costs of the F-35 program. The question is what was the quid-pro-quo in this instance?

Dave Collum's 2016 Year In Review - "And Then Things Got Really Weird..."

"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."

Frontrunning: December 23

  • Berlin market attack suspect killed in Italy (Reuters)
  • Tunisian Suspect Had a History of Criminal Activity, Extremism (WSJ)
  • Hijacked Libyan plane lands in Malta with 118 on board (Reuters)
  • Deutsche Bank, Credit Suisse Settle U.S. Probes as Barclays Sued (BBG)
  • Italy Sets Up Fund to Help Troubled Banks (WSJ)

Futures Unchanged In Thin Pre-Holiday Tape; Italian Bank Bailout Lifts European Shares

European stocks halted two days of declines, with the Stoxx 600 fractionally in the green and Italy’s bonds climbing after Monte Paschi requested a bailout and Italy pledged to provide support for its other ailing lenders. S&P futures were little changed among extremely thin volumes while Chinese stocks dropped amid concerns on higher borrowing costs.

Despite Trump Hope, Durable Goods Tumbles Most Since Aug 2014 As Non-Defense Orders Crash

Despite exuberance in soft "survey" data post-Trump, as hope for change re-appears, "hard" data continues to disappoint with Industrial production weakness and now durable goods orders tumbling 4.6% MoM (slightly better than expected -4.8%) - the biggest drop since Aug 2014. Durable Goods New Orders decline YoY once again (-0.5%) as ex-defense orders crashed 6.6% MoM (-2% YoY).