Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

My five-year-old son just finished his first season of AYSO soccer. His team was stunningly dominant, as we had a couple of future FIFA all-stars on the squad. Despite being the only player on his team who hadn’t played soccer before, he did well and most importantly he had fun. Indeed, during the end of season award ceremony, his coach awarded him Happiest Player. The level of talent on our team (the Jedis) was such that my son didn’t get a lot of ball time, but he showed up with a positive attitude, happy just to play, and even scored a goal during the last few minutes of the season.

As we enter the home stretch of 2019, I would like to award the U.S. stock market with the Happiest Market award. Despite all the challenges for risk assets: escalation of the trade war, inversion of the yield curve, the abrupt pivot in Federal Reserve (Fed) policy, falling leading indicators and repeated concerns regarding late-cycle economic growth, the U.S. has avoided a recession. At the time of this writing, the S&P 500 is up over 26% – putting it on pace to deliver its best calendar return since 2013.

Looking forward to 2020, we expect the environment for stocks to continue to be constructive. Global economic activity, though still stuck in second gear, has been stabilizing. Earnings growth is set to reaccelerate, and global central banks remain steadfast in their efforts to meet inflation targets by maintaining low interest rate policies.

This week we will see a lot of key inflation data, which has been falling for most of the year. To wit, the latest inflation print came in at just 1.5% annualized. At the end of October, the Fed cut short-term rates by 0.25% and said that they would only change if there was a “material” change in the U.S. economic outlook. With inflation risks tilted to the downside, it is unlikely we will see rate hikes for some time to come, which should help keep markets happy.

Data deck for December 9–December 13: