The U.S. stock market took investors for a wild ride in 2015, but in the end it was a trip to nowhere. Equities began the year with a slow start as investors worried about falling crude prices, flat earnings growth and when the Fed would begin raising rates. By May, stocks were hitting new highs, but the market didn't stay there for long. Worries about slowing Chinese growth in the summer gave reason for the Fed to pause and for traders to fret, sending U.S. indexes into a correction, although the last few months they've marked a return to their initial starting point. Better luck in 2016?

Economy

Global economic growth will be "disappointing and uneven" next year, the head of the International Monetary Fund said in a guest article for German newspaper Handelsblatt. "In many countries the financial sector still has weaknesses and in emerging markets the financial risks are increasing," IMF Managing Director Christine Lagarde declared. She added that low productivity, aging populations, a decline in raw materials, and the effects of financial crises were putting the brakes on a global expansion.

China could run its biggest budget deficit in perhaps half a century next year as leaders turn to government spending to arrest the slowdown in the economy. Growth is about to hit a quarter-century low of 7% and deflationary pressures still persist, despite a year of interest rates cuts, fund injections and easier loan requirements. According to policy advisers, China will likely increase its budget deficit to about 3% of GDP in 2016 from a target of 2.3% this year to help cushion against the possible impact on the economy from structural reforms.

After months of holding out, the Philippines has announced it will join the China-led Asian Infrastructure Investment Bank before tomorrow's deadline for founding members. Its indicative paid-in capital will be $196M, payable over five years. The Philippines membership to the AIIB was previously seen as shaky, as the country is among several nations involved in territorial disputes with Beijing in the South China Sea.

Sustained pressure on crude prices is having traders turn cautious, with renewed selling being felt in the equities markets. Weekly data from the American Petroleum Institute showed a rise of 2.9M barrels last week, defying expectations of no change and rekindling fears of a supply glut. The U.S. Energy Department issues its official figures this morning at 10:30 a.m. ET. Brent -1.9% to 37.09/bbl; WTI -2.6% to 36.90/bbl.

Running out of both time and money, debt-laden Puerto Rico appears headed for default on at least some of the roughly $1B in bond payments it owes on Jan. 1. The island has suggested in official filings that enough cash can be found to pay about $330M due on general obligation bonds (which are constitutionally guaranteed), but only by diverting cash from other types of bonds. A failure to make payments due on those would leave a mysterious hierarchy of creditors wondering whether to sue now or hope for some payment, even a lower one, down the road.

Stocks

KaloBios Pharmaceuticals, the biotechnology company formerly led by Martin Shkreli, has filed for Chapter 11 bankruptcy, listing both its assets and liabilities in the range of $1M-$10M. The move comes on the heels of KaloBios' (NASDAQ:KBIO) appeal of the Nasdaq decision to delist its shares, as well as the firm's failure to file a quarterly financial report.

U.S. District Judge Robert Sweet has certified two shareholder class actions accusing Facebook (NASDAQ:FB) of hiding concerns about its growth forecasts prior to its initial public offering in May 2012. The ruling means retail and institutional investors who assert they lost money by purchasing shares at inflated prices may pursue their claims as groups. Facebook made its market debut on May 18, 2012 at $38/share, but its stock fell to $17.55 on Sept. 4, 2012 and stayed below its IPO price for more than a year.

Google Glass has finally gotten its long awaited makeover. A new FCC filing reveals a reboot of the device, called GG1, although it still may be some time before it's ready for consumer release. What's new? It lacks a nose-bridge, has foldable arms, does not fully wrap around the user's face, and contains improved tech specs (processor, battery life and wireless connectivity). The biggest feature: Google's (GOOG, GOOGL) initial version of glass, which sold for $1500, prompted a widespread privacy backlash because of the inability to see when the device was recording, but the new gadget will see a green light come on when it's capturing video.

Lacking the scale to effectively compete against UBER and LYFT, pioneer Sidecar is shutting down its ride and delivery service on Dec. 31, although it's still promising to "lay the groundwork for the next big thing." Whereas Uber has raised over $10B over its lifetime and Lyft $1.26B, Sidecar had only raised $35M. Co-founders Sunil Paul and Jahan Khanna note their company was dealing with a "significant capital disadvantage."

McDonald's closed at an all-time high of $120 on Tuesday, continuing its slow upward trek after breaking out in October. The successful runout of All-Day breakfast and the company's plan to refranchise up to 95% of its stores are seen as positive drivers for shares. Recent traffic checks have also shown positive same-store sales growth for the QSR (Quick Service Restaurant) category where McDonald's (NYSE:MCD) is the biggest player.

Activist investor Carl Icahn appears to have made the winning bid for Pep Boys (NYSE:PBY), after rival bidder Bridgestone said it would not increase its offer. Shares of the auto-parts company shot up 8.9% on Tuesday once Icahn Enterprises (NASDAQ:IEP) raised its bid to $18.50/share in cash, valuing Pep Boys at about $1B. Icahn is already the second-largest shareholder in the business with a 12.1% stake.

DuPont is planning to cut 1,700 jobs in its home state of Delaware, and thousands more globally, as the conglomerate pursues $700M in cost savings ahead of its planned merger with Dow Chemical (NYSE:DOW). Chief Executive Ed Breen also announced that Wilmington, DuPont's (NYSE:DD) hometown for 213 years, will be the headquarters of one of three planned spinoffs (agriculture, material science and specialty products) following the tie-up. Dow and DuPont expect their combination to cut annual expenses by $3B.

More SeaWorld drama? The company has sued California authorities, seeking to overturn a decision that allows its San Diego theme park to expand its orca habitat only if it stops breeding killer whales in captivity. "The condition forces SeaWorld to either agree to the eventual demise of its lawful and federally regulated orca exhibition, or withdraw the permit application and forego the effort to enhance the orcas' habitat," SeaWorld Entertainment (NYSE:SEAS) attorneys said.

Federal regulators are looking for ways to ensure that drones operating beyond sight - such as delivery drones - stay away from manned aircraft. A preliminary plan calls for relying on what is known a ADS-B technology, a system planes use to determine and broadcast their location via satellites, which would allow drones to sense manned aircraft and automatically avoid them. Alphabet (GOOG, GOOGL) has already proposed using a system similar to ADS-B, but is less costly, while Amazon (NASDAQ:AMZN) has suggested segregating the airspaces between manned aircraft and different types of drones. Related stocks: AMBA, AVAV, DJI, OTCQB:DRNE, DPZ, HON, INVN, IXYS, GPRO, TRMB

Julius Baer, one of a dozen Swiss banks to come under U.S. investigation for helping American clients dodge taxes, has set aside another $200M to settle the probe, bringing the total amount earmarked to cover potential penalties to $547M. Despite the charge, Julius Baer (OTCPK:JBAXY) said it expects to report an adjusted net profit for the current year.

The Oracle of Omaha is headed for his worst year relative to the rest of the U.S. stock market since 2009, with shares in Berkshire Hathaway (BRK.A, BRK.B) down 11% with just two more trading sessions to go. What's been eating at the stock? While the company doesn't have oil and gas subsidiaries, its railroad business transports oil, coal and agricultural products, and its manufacturing arm sells products to the shrinking oil industry. Berkshire has also been hit by big declines in two of its largest investments: American Express (-24%) and IBM (-13%) YTD.

Today's Markets

In Asia, Japan +0.3% to 19034. Hong Kong -0.5% to 21882. China +0.3% to 3573. India -0.5% to 25960.
In Europe, at midday, London -0.4%. Paris flat. Frankfurt -0.6%.
Futures at 6:20, Dow -0.2%. S&P -0.1%. Nasdaq -0.1%. Crude -2.6% to $36.90. Gold -0.1% to $1067.
Ten-year Treasury Yield -1 bps to 2.29%

Today's Economic Calendar

7:00 MBA Mortgage Applications
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM Farm Prices