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It seemed that the end of an already tough year would bring some relief, but that’s not the case. In just one week, six major aviation incidents occurred, two of which resulted in dozens of fatalities.
On Wednesday, Azerbaijan Airlines Flight 8243 crashed, killing 38 passengers. Although a bird strike was initially suspected, authorities later claimed that the plane was hit by a Russian missile by mistake.
Then, on Sunday, Jeju Air Flight 2216 crashed in South Korea due to a landing gear failure, killing 179. A bird strike near the airport is suspected, but a technical issue with the Boeing aircraft could also be to blame.
If it turns out to be the latter, it could be another setback for the U.S. carrier, which already faces scrutiny for its previous accidents. Fortunately, no injuries were reported in the other incidents.
Geopolitics also remained tense: Afghan forces attacked several areas in Pakistan in retaliation for an airstrike in which 46 people were killed. Islamabad claimed the targets were militant hideouts.
Rising regional tensions could fuel extremism, disrupt energy supplies, and affect global supply chains, triggering a new wave of inflation, which would be the worst present for Central Banks.
In another week’s highlights, Donald Trump promised Canadian citizens a 60% tax cut if the country became the 51st state in the U.S. He said the move would also help double business activity.
Overall, despite the short Christmas week, there were many developments, most of them negative. Still, the S&P 500 was up 0.7%, the Dow Jones gained 0.4%, and the Nasdaq was up 0.8%.
However, Friday saw a correction as some investors chose to take profits, driven by high Treasury yields and concerns over a more hawkish Fed, especially with the disinflation trend showing signs of slowing down.
As for what to expect in the year ahead, most prominent investment banks are optimistic about the S&P. For example, Wells Fargo and Deutsche Bank expect the index to reach 7,000 within a year.
Still, there can always be room for a negative surprise, like the ones we’ve seen in geopolitics.
