The North American Free Trade Agreement (NAFTA) is just about to be formally replaced by the United States–Mexico–Canada Agreement (USMCA). This news has generated both headlines and optimism in recent weeks, as a sign that progress can be made on trade issues. With the approval of the agreement by both the House and the Senate here in the U.S., and the pending signature by President Trump, it looks like the USMCA will become the law of the land very soon. But what does this mean?

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Market Risk Update. Thanks for the assist, Sam!

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

Last week, a reader had an interesting question in response to the Homer Simpson economic video. He wondered, given the number of jobs that Homer Simpson has had and how compensation has changed over time, is there a good analysis of income versus inflation? I didn’t know of any such analysis, so I decided to come up with one. Since much of the analysis around this question is less than clear (to be frank), I also decided to use it as a primer on how to read through economic statistics. As always, caveat emptor!

As I do every month, it’s time to take a look back at what happened in the previous one and what it could mean going forward. With the start of a new year, we have a lot to cover.

The news this morning that a top Iranian commander was killed in a U.S. drone strike sent global markets reeling. According to news reports, Iran is now vowing to retaliate, which means terrorism and cyberattacks are likely. Here in the U.S., apparently, Congress was not notified of the strike ahead of time. The heightened risk factors we must now consider include increased domestic political dysfunction, a rising risk of military action (either by us or against us in an already troubled area), and a probable disruption of the oil markets.

We closed out the year and the decade on a burst of strength. December was a great month, and it capped a great 2019. U.S. markets were up more than 2 percent and, in some cases, considerably more than that. For the year, they were up more than 20 percent. International markets also had a strong year. In December, job growth came in much better than expected, continuing a trend that has more and more people joining the labor force. For the ninth month in a row, both income and spending went up. The housing sector did very well, and there’s a lot of confidence baked into that. So, December was a great handoff to 2020.

I suspect not too much work will get done today, at least in my house, so let’s have some fun. Below are links to some of my favorite economic and investing videos. In true economist fashion, I have categorized them appropriately. Note that I may not agree with the content—especially for the funny ones! Start at the top.

Do I think there’s a market pullback ahead? I appeared on CNBC’s Power Lunch on Friday to discuss this and more. 

I have been thinking a lot about the next decade. As we enter 2020, we know only a couple of things, but we should keep them in mind as we plan ahead.