The Week Ahead: Dec. 1, 2024
— Canadian Prime Minister Justin Trudeau traveled to Florida to meet with President-elect Donald Trump at Trump’s Mar-a-Lago estate on Friday, Nov. 29. The two leaders had dinner together at Mar-a-Lago, which lasted approximately three hours. The discussion covered a wide range of topics, including trade, border security, defense, Ukraine and other bilateral issues. The leaders addressed concerns about illegal immigration and drug trafficking, particularly fentanyl. The dinner table included other notable figures such as Sen.-elect Dave McCormick, former Treasury Secretary Hank Paulson, North Dakota Governor Doug Burgum, and Rep. Mike Waltz. This meeting took place in the wake of Trump’s recent threat to impose sweeping tariffs on goods from Canada and Mexico. Specifically, Trump announced his intention to implement a 25% tariff on all products entering the U.S. from Canada and Mexico as one of his first executive orders upon taking office. Prior to the meeting, Trudeau had cautioned that imposing such tariffs would: Trudeau emphasized the importance of constructive dialogue and expressed his readiness to work with Trump on addressing mutual concerns. Prime Minister Justin Trudeau’s government will step up border enforcement in a “visible and muscular way,” according to a top Canadian official, as the nation tries to avoid tariffs from Donald Trump’s new administration. We got a mutual understanding of what they’re concerned about in terms of border security measures,” Public Safety Minister Dominic LeBlanc said in an interview with the Canadian Broadcasting Corp. (CBC). The government will announce additional border resources “in the coming days or weeks,” which may include more drones, helicopters and staff, he said. LeBlanc — whose portfolio includes Canada’s border agency — told the CBC he discussed tariffs and the border with Howard Lutnick, Trump’s pick for Commerce Secretary. The two men exchanged text messages over the weekend and are likely meet again soon, he said. Trump invited Trudeau to Florida during a phone conversation on Monday evening, according to LeBlanc. “It was a very warm, cordial meeting, and I saw very much the mutual respect and warmth between the two leaders,” he said of Friday’s dinner discussion. Trump said on social media on Saturday that Trudeau “has made a commitment to work with us” to impede drug trafficking. Trump described the meeting as “very productive” in a post on his social media platform, Truth Social. Trump highlighted several key points from their discussion: Trump concluded by stating that these were vital issues he would address in his first days back in office. While he provided these details, he did not explicitly mention whether the tariff threat was still in place. Bottom line: Following the meeting, Trudeau characterized the conversation as “excellent” and “productive.” He expressed his belief in addressing matters through constructive dialogues with Trump. The meeting was seen as a crucial step in managing bilateral relations ahead of Trump’s potential second term beginning Jan. 20, 2025. The meeting also highlighted the delicate position Trudeau finds himself in, with a slowing Canadian economy and declining popularity ahead of the upcoming general election, which must be held by late October 2025. — Republicans will have a razor-thin majority in the House. The final outcome was extremely close, with Republicans maintaining control of the House of Representatives by a narrow margin. Republicans secured a slim majority in the House, winning 220 seats. Democrats won 215 seats. This result represents a slight change from the previous composition of the House, where Republicans held 221 seats and Democrats held 214 seats prior to the election. President-elect Donald Trump tapped three House Republicans to be part of his administration (Rep. Matt Gaetz of Florida dropped out of Cabinet contention but is not returning to his seat in Congress). The three GOP seats are all safe for Republicans but will not likely be filled until April 2025. That means the GOP House majority early in the new Congress will be 217 to 215. The razor-thin majority presents challenges for the Republican leadership, as even a small number of defections could impede their ability to pass legislation. This narrow margin may lead to continued difficulties in governing, like the issues faced in the previous term when a handful of conservative members were able to significantly disrupt proceedings. However, this time the Republicans will have Trump at the top of their party. Eight districts flipped from Republican to Democratic control in the 2024 House elections. Here are the districts that changed from Republican to Democratic: Some of these flips were influenced by redistricting, particularly in New York. For example: In New York’s 19th District, Democrat Josh Riley defeated Republican incumbent Marcus Molinaro, flipping the seat back to Democratic control after Molinaro had won it in 2022. In New York’s 22nd District, Democrat John Mannion flipped the seat, defeating Republican incumbent Brandon Williams. This flip was partly due to redistricting that shifted the district to include more left-leaning cities. Of note: Four Dem states account for 85 of their 215 House members: Republicans flipped seven Democratic House seats in the 2024 election: Of note: All three GOP pickups in N.C. were the result of redistricting changes. — Donald Trump named Kash Patel as FBI director on Saturday as the president-elect looks to force out the current leader, Christopher Wray. He also picked real-estate magnate Charles Kushner as U.S. ambassador to France. — President-elect Donald Trump issued a significant threat to the BRICS nations regarding their potential move away from the U.S. dollar. On Saturday, Dec. 1, Trump posted on his Truth Social platform, warning of severe economic consequences if these countries attempt to create an alternative currency. Trump demanded a commitment from BRICS countries not to create a new currency or support any alternative to the U.S. dollar. He threatened to impose a 100% tariff on these nations if they fail to comply with this demand. Specifically, Trump stated: “We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.” The BRICS alliance, which originally included Brazil, Russia, India, China, and South Africa, has recently expanded to include Iran, Egypt, Ethiopia, and the United Arab Emirates. These countries have been discussing moving away from the U.S. dollar in recent years, particularly after the U.S. imposed sanctions on Russia over its war in Ukraine in 2022. Trump’s threat carries significant weight, as several BRICS countries are key trading partners with the United States. For instance, in 2022, trade in goods and services between the U.S. and China was approximately $758.4 billion, while trade with India reached around $191.8 billion. This threat comes in the context of Trump’s broader stance on international trade and tariffs. Last Monday, Trump announced plans to impose a 25% tariff on imports from Mexico and Canada, as well as an additional 10% tariff on Chinese goods, citing concerns over illegal immigration and drug trafficking. |
| WASHINGTON FOCUS |
The lame-duck congressional session beginning this week is an apt description of this Congress: lame. Consider the following:
• No action even for a Congress that likes to spend, spend, spend. Lawmakers from both parties were unable to get appropriations bills through for fiscal year 2025, which began Oct. 1, even though they had many months to do so. In fact, very few spending measures were approved. Lawmakers now have until Dec. 20 to reach a continuing resolution (CR) measure that will likely go into March 2025. Kicking the can down the road… again. Lame.
• Utter failure to pass a new farm bill. The House Ag Committee passed its new farm bill in May, but it was never presented to the House floor for a vote. Why? Lame.
• The farm bill stabbing of Stabenow. Outgoing and retiring Senate Ag Chair Debbie Stabenow (D-Mich.) waited until after Nov. 5 election results were known before finally releasing official text of her farm bill, only to have it dubbed dead-before-arrival. Very lame.
• The new farm bill becomes the old farm bill, again. Lawmakers now much pass another extension of the 2018 Farm Bill to mark their two-year defeat in reaching a new measure. Another definition of lame.
• A stealth, extension-plus farm bill measure will be attempted by some farm-state lawmakers via a push for financial aid to the ag sector. If successful, the push for higher reference price language and some additional crop insurance incentives would mean a larger farm bill budget baseline when farm-state lawmakers try for the third time to ink a new farm bill in 2025, sans retiring Stabenow. Let’s see if farm-state lawmakers can ever get something through.
• Ag disaster funding has been needed for months. Congress will get to the task before they leave as part of a more comprehensive disaster aid package. Ag disaster funding will be over $20 billion, but the final tally will be determined by Congress, not by the outgoing Biden administration. The last ag disaster program implemented by the Vilsack-led USDA was a disaster. This is why farm-state lawmakers are expected to do what they should have done before: tell USDA how the program should be implemented… in a farmer-friendly manner and not geared to a favored constituency. Finally.
— House Speaker Mike Johnson (R-La.) will host Elon Musk and Vivek Ramaswamy at the U.S. Capitol on Dec. 5 to discuss their plans for the Department of Government Efficiency (DOGE). The session will be with Republican congressional leaders. This meeting underscores the growing interest among GOP lawmakers in the proposals put forth by Musk and Ramaswamy.
DOGE, despite its name, is not an official government department but rather an advisory committee appointed by President-elect Donald Trump. Its primary objectives include:
• Slashing government spending
• Reducing regulations
• Restructuring federal agencies
Musk and Ramaswamy have outlined ambitious goals for DOGE, including:
• Targeting $500 billion in annual spending cuts
• Aiming to eliminate “expenditures that are unauthorized by Congress”
• Proposing cuts to entities such as the Corporation for Public Broadcasting, international organizations, and Planned Parenthood
• Considering the abolishment of federal agencies like the Consumer Financial Protection Bureau
The dynamic duo also expressed intentions to significantly reduce the federal workforce, potentially leading to “mass head-count reductions across the federal bureaucracy.” They’ve suggested implementing policies such as requiring federal workers to be in the office five days a week, which they predict would result in voluntary terminations.
Some lawmakers, their staffs and many lobbyists note many of these proposals would require congressional approval, as the House holds the power to allocate federal funds to government agencies. Given the narrow Republican majority in the House, implementing such sweeping changes will face significant challenges. Meanwhile, critics have raised concerns about the feasibility and potential impact of DOGE’s proposals. Some argue that the initiative rebrands harsh conservative ideologies in a trendy manner, presenting austerity and deregulation as modern and fashionable
Naysayers point to past commissions (like the Grace Commission) which failed. But Musk and Ramaswamy say they are not writing a book to get dusty on a shelf ala the Grace Commission. The two Trump appointees have a successful record in finding efficiencies saving billions of dollars. Critics argue that Musk’s private-sector downsizing strategies, like cutting jobs at Twitter, may not directly apply to federal government costs, which are primarily driven by entitlement spending rather than employment.
Trump has tapped Elon Musk as his “government efficiency chief,” aiming to cut at least $2 trillion in annual federal spending, about one-third of the non-interest budget. Musk plans to streamline federal operations and eliminate waste, focusing on executive-order changes rather than legislative reform. Strategies include targeting discretionary spending, reforming federal regulations, and introducing tariffs to generate revenue. Meanwhile, Hedge fund manager Scott Bessent, incoming Treasury Secretary, has set goals to reduce the federal deficit to 3% of GDP by 2028 (it’s over 6% now).
Other ideas being floated include creating a strategic bitcoin reserve to profit from future gains and circumventing the Impoundment Control Act to cut federal spending more aggressively.
Some hurdles ahead. Deregulation and productivity gains are expected to offset spending cuts, but trade wars and reduced federal spending could pose economic headwinds. And this reality: With much of federal spending allocated to defense and entitlement programs, achieving significant reductions in the discretionary budget will be challenging.
| ECONOMIC REPORTS & EVENTS |
Wall Street braces for key economic data and earnings updates. This week, Wall Street’s spotlight will be on Friday’s nonfarm payrolls report for November. This follows October’s disappointing 12,000 job additions, impacted by hurricanes and the Boeing strike. Deutsche Bank forecasts a rebound to 200,000 jobs in November. Ahead of the report, traders will monitor the October JOLTS data and ADP’s private employment numbers. Federal Reserve Chair Jerome Powell and ECB President Christine Lagarde are set to speak midweek at separate events.
On the earnings front, fewer companies will report, with notable names including Zscaler, Salesforce, Marvell Technology, American Eagle Outfitters, Lululemon Athletica, and Kroger.
Monday, Dec. 2
• S&P Global Manufacturing PMI Final
• ISM Manufacturing PMI
• Construction Spending MoM
Tuesday, Dec. 3
• JOLTS Job Openings
• RCM/TIPP Economic Optimism Index
• Auto sales
Wednesday, Dec. 4
• Federal Reserve: St. Louis Fed President Musalem speaks
• ADP Employment Change
• S&P Global Composite PMI Final
• S&P Global Services PMI Final
• Federal Reserve Beige Book
• ISM Services PMI
• Factory Orders MoM
Thursday, Dec. 5
• Jobless Claims
• U.S. International Trade in Goods and Services for October
• Fed Balance Sheet
• Money Supply
Friday, Dec. 6
• Federal Reserve: Chicago Fed President Goolsbee speaks
• Employment (Non-Farm Payrolls; Unemployment Rate; Average Hourly Earnings MoM and YoY)
• Michigan Consumer Sentiment Preliminary
• Consumer Credit
| KEY USDA & INTERNATIONAL AG & ENERGY REPORTS & EVENTS |
USDA’s update on farm income comes Tuesday while the monthly UN FAO report on food prices is released Friday.
OPEC+ ministers will hold discussions Thursday on whether to press ahead with plans to start gradually restoring halted oil production, or again delay the move.
Monday, Dec. 2
Ag reports and events:
• Export Inspections
• Purdue Agriculture Sentiment
• Census: Specialty Crops
• Cotton System Consumption and Stocks
• Fats and Oils: Oilseed Crushings, Production, Consumption
• Grain Crushings and Co-Products Production
Energy reports and events:
• French President Emmanuel Macron due to make state visit to Saudi Arabia (through Dec. 4)
• Gulf Petrochemicals & Chemicals Association Forum, Muscat, Oman (through Dec. 5)
• Spain’s Cores to release provisional fuel consumption data for October
• Holiday: Scotland, UAE
Tuesday, Dec. 3
Ag reports and events:
• December 2024 Farm Income Forecast
• Australia’s ABARES quarterly report
• Asia International Coffee Conference, Ho Chi Minh, Vietnam, day 1
• EU weekly grain, oilseed import and export data
Energy reports and events:
• API weekly U.S. oil inventory report
• BNEF Summit, Shanghai (through Dec. 4)
• Saudi Green Initiative Forum (through Dec. 4), Riyadh
• Gulf Petrochemicals & Chemicals Association Forum, in Muscat, Oman (through Dec. 5)
• Conference on Renewable Marine Energy, Paris
• UN General Assembly plenary meeting to debate Middle East
• Holiday: UAE
Wednesday, Dec. 4
Ag reports and events:
• Broiler Hatchery
• Dairy Products
• Asia International Coffee Conference, Ho Chi Minh, Vietnam, day 2
Energy reports and events:
• EIA weekly U.S. oil inventory report
• U.S. weekly ethanol inventories
• Genscape weekly crude inventory report for Europe’s ARA region
• BNEF Summit, Shanghai (last day)
• Gulf Petrochemicals & Chemicals Association Forum, in Muscat, Oman (through Dec. 5)
• Saudi Green Initiative Forum (last day), Riyadh
• IEA Global Conference on Energy and AI, Paris (through Dec. 5)
• Spain’s Cores crude import data for October
Thursday, Dec. 5
Ag reports and events:
• Weekly Export Sales
• European Commodities Exchange, Paris
• StatsCanada production data for soy, wheat, barley and canola
• Malaysia’s Dec. 1-5 palm oil exports
• Port of Rouen data on French grain exports
Energy reports and events:
• EIA natural gas storage change
• Insights Global weekly oil product inventories in Europe’s ARA region
• Singapore onshore oil-product stockpile weekly data
• Gulf Petrochemicals & Chemicals Association Forum, in Muscat, Oman (last day)
• OPEC+ discussions on output
• IEA Global Conference on Energy and AI, Paris (last day)
• European Industrial Carbon Management Summit, Brussels
• Holiday: Thailand
Friday, Dec. 6
Ag reports and events:
• CFTC Commitments of Traders report
• Peanut Prices
• Livestock and Meat International Trade Data
• United Nation’s FAO food price index and monthly grains report
• AMIS Market Monitor
• European Commodities Exchange, Paris
• FranceAgriMer’s weekly crop condition report
Energy reports and events:
• Baker Hughes weekly U.S. oil/gas rig counts
• ICE weekly Commitments of Traders report for Brent, gasoil
| KEY LINKS |
WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | | Russia/Ukraine war, lessons learned | | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum |