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Russian President Vladimir Putin has made clear to both his citizens and to the world that the 'special military operation' in Ukraine will continue on until all goals are achieved, and that his forces are advancing 'confidently'.

He chaired a televised meeting with the country's top military officials, focused on a status update regarding Ukraine, and crucially coming the day after Presidents Trump and Zelensky met in Florida in a failed effort to reach breakthrough on the proposed peace deal. Moscow is pressing ahead with its goal of fully capturing and pacifying the four Ukrainian regions it declared part of the Russian Federation in fall of 2022 via a 'popular referendum'.

"The goal of liberating the Donbas, Zaporizhia and Kherson regions is being carried out in stages, in accordance with the plan of the special military operation," Putin described before underscoring, "The troops are confidently advancing."

At the meeting it was also announced that Russian troops have made more gains in the last 24 hours, especially the capture of Dibrova village in Donetsk region.

According to an update of the meeting via RT translation, battlefield gains of the past month are significant:

In December, Russian forces liberated over 700 square kilometers of territory, taking some 32 settlements under control, Gerasimov said at the meeting. This month, the military has shown the highest rate of progress in the entire outgoing year, he noted, adding that troops are advancing “along virtually the entire frontline.”

"The adversary is not undertaking any active offensive actions. They have concentrated their main efforts on strengthening their defenses and are attempting to slow the pace of our advance by conducting counterattacks in isolated areas and using drones en masse," Gerasimov said.

The Kremlin has at the same time reiterated that it is not interested in a 'Plan B or Plan C' in terms of a peace deal, but that it only seeks lasting political settlement. This will of course include international recognition of its territories in the Donbass.

According to highlights the Russian president’s speech after his meeting with top defense officials, via a TASS and Al Jazeera compilation:

• Attempts by Ukraine to interfere with the Russian army in Kupiansk must be decisively suppressed.
• The capture of Siversk allows for the development of offensives towards the cities of Sloviansk and Kramatorsk.
• Prospects for the complete capture of the Donbas territory have been discussed.
• Expansion of the security zone along the Russian-Ukrainian border is on the table.
• Troops have broken through the Ukrainian defences and are advancing towards the city of Zaporizhzhia.

Putin tells Russian generals:

It’s necessary to continue the operation to gain control of the city of Zaporizhzhia. pic.twitter.com/AT0XkCbkV5

— Clash Report (@clashreport) December 29, 2025

Putin, surrounded by his generals, is making clear to the world that he remains in the driver's seat - with all the leverage on the field of battle - and that Zelensky has no cards to play.

Authored by Lance Roberts via RealInvestmentAdvice.com,

There is a rising market risk in 2026 that is largely overlooked as we wrap up this year. As discussed in the “Fed’s Soft Landing Narrative,” optimism about 2026 is running high.

Currently, investors are pricing in strong economic growth, robust earnings, and a smooth path of disinflation. Notably, Wall Street estimates suggest a significant acceleration in corporate profits, particularly among cyclical stocks and small- to mid-cap sectors. To wit:

“Wall Street currently expects the bottom 493 stocks to contribute more to earnings in 2026 than they have in the past 3 years. This is notable in that, over the past three years, the average growth rate for the bottom 493 stocks was less than 3%. Yet over the next 2 years, that earnings growth is expected to average above 11%.”

“Furthermore, the outlook is even more exuberant for the most economically sensitive stocks. Small and mid-cap companies struggled to produce earnings growth during the previous three years of robust economic growth, driven by monetary and fiscal stimulus. However, next year, even if the Fed’s soft landing narrative is valid, they are expected to see a surge in earnings growth rates of nearly 60%.”

There is nothing wrong with having an optimistic outlook when it comes to investing; however, “outlooks can change rapidly,” which is a significant market risk, particularly when expectations and valuations are elevated.

Notably, these forecasts rest on an assumption that the economy will not only avoid recession but reaccelerate in the face of waning inflation. As noted, equity markets have responded by pushing valuations higher across major indexes, with price-to-earnings ratios well above historical medians. Simultaneously, investors have rewarded narratives built on the idea of a soft landing and a return to pre-pandemic trends.

However, this narrative appears to overlook the trends in recent economic data. Inflation expectations have moderated, not because of increased demand, but due to weaker consumption and cooling labor dynamics. As recent economic data indicate, disinflation has accompanied slower GDP growth and a decline in personal consumption momentum. If the economy were indeed set to reaccelerate, these trends should be increasing rather than returning to historical averages.

The soft landing thesis posits a benign cycle in which inflation declines, growth remains stable, and earnings increase. Yet, that outcome would be historically rare. When inflation falls this quickly, it typically reflects a slowdown in demand rather than policy success. Additionally, the strong relationship between economic growth and earnings should not be dismissed. That disconnect exposes investors to market risk if growth does not materialize as expected and valuations are reconsidered.

With analysts expecting strong revenue growth and margin expansion despite rising input costs, global uncertainty, and declining employment, a market priced for perfection leaves little room for earnings misses or growth shocks. If those optimistic assumptions fail, market risk could rise abruptly.

Let’s dig in.

Structural Headwinds

As noted above, earnings growth is fundamentally tied to economic growth. When demand exceeds supply, companies expand output, raise prices, and increase profits. As discussed recently, this is why, without inflation, there can not be economic growth, increasing wages, and an improving standard of living. In other words, for there to be stronger economic growth and rising prosperity, prices must increase over time. Such is why the Fed targets a 2% inflation rate, thereby supporting 2% economic growth and stable employment levels.

However, the employment data over the last year doesn’t tell a story of substantial employment, rising wages, or a trend suggesting a more robust economic outlook. Instead, the latest data confirmed a deceleration in economic activity, as full-time employment (as a percentage of the population) declined.

The importance of full-time employment should not be readily dismissed. Full-time employment pays higher wages, provides family benefits, and allows for an expansion of consumption. The decline in full-time employment currently is normally associated with recessions rather than expansions. Economic growth, inflation, and personal consumption are trending lower, given that employment, particularly full-time employment, supports economic supply and demand.

Furthermore, economic growth relies heavily on consumer spending, which accounts for nearly 70% of U.S. GDP. For that consumption to persist or grow, consumers must have rising incomes, which come from employment and wage growth. Without job creation or real wage increases, consumption growth stagnates, and the earnings narrative breaks down. As shown, when economic growth declines, so do earnings growth rates.

Recent employment data show cracks in this cycle. While headline job numbers suggest continued hiring, the quality and composition of those jobs are weakening. Today we see part-time workers filling full-time positions, often with lower pay and fewer benefits. Labor force participation remains below pre-pandemic levels, and many prime-age workers are not returning. Most notably, the negative revision of every monthly employment report in 2025 further undermines the “strong economy” narrative.

Even where wages are rising nominally, inflation-adjusted wages tell a different story. Real wage growth has been flat or negative in several key sectors. As housing, energy, and service prices remain high, the squeeze of disposable income increases. As such, consumers compensate by drawing down savings or using credit, both of which are unsustainable long-term strategies.

The market risk in 2026, is that for corporate earnings to accelerate and meet Wall Street’s expecations, the consumer must be healthy. That means rising real wages and broad-based job creation. Without those pillars, top-line revenue growth slows, and margin pressures increase. Analysts projecting double-digit earnings growth into 2026 are assuming a demand-driven economy without the income growth needed to support it. That assumption is increasingly fragile. Without real economic growth, earnings become a product of financial engineering or cost-cutting, not organic expansion. Markets are pricing in a demand surge that the employment data do not confirm.

If this disconnect persists, Wall Street will revise earnings expectations lower.

Valuation Fragility

That last sentence is the most crucial. With valuations near cycle highs, (the S&P 500 trades at over 22x times forward earnings, which is well above its long-term average), such assume strong earnings growth and low discount rates. Yet both assumptions are vulnerable. If economic growth undershoots, earnings revisions will follow. Historically, earnings have tended to lag behind the economic cycle. As consumption softens, revenue growth stalls. Margins then compress, especially for companies with high labor or financing costs, and with narrow market breadth and concentration in mega-cap names, the market risk is a sudden repricing of those expectations.

Credit risk premiums remain compressed across all asset classes, from high-yield to investment-grade, which reflects a belief in Fed control and continued monetary easing. If those beliefs are shaken, volatility will return. Market participants are not expecting a scenario where all risk assets decline simultaneously, including stocks, crypto, precious metals, and international markets.

Implications for Investors

The market risk for investors is not a 2008-style collapse. However, a far more likely scenario is a long period of underperformance. That underperformance will likely be a function of earnings disappointment, weak growth, and multiple compression. Market analysts are currently pricing the market for acceleration. But those views may struggle is stagnation, and the “path of least resistance,” shifts from upward momentum to sideways drift or correction.

As such investors should continually monitor and assess the risk they are taking in portfolios.

• Reassess exposure to high-multiple equities and overconcentrated sectors. While technologty drives index performance, valuations are high and if growth expectations are too high, tech earnings will likely fail to meet them. The same applies to consumer discretionary stocks tied to fragile spending.

• Consider a more defensive position, focusing on free cash flow, balance sheet strength, dividends, and pricing power.

• Add bonds to your portfolio to protect prinicpal and create income. Furthermore, in the event of a risk-off rotation, investors will seek the safety of bonds to reduce portfolio risk. Being there before the correction occurs can be beneficial to outcomes.

• Liquidity should always be a priority. If risk aversion returns, liquidity conditions can tighten quickly. Investors consider a scenario where risk assets (stocks, commodities, metals, and cryptocurrencies) decline sharply as risk resets

A prudent approach is to reduce exposure to narrative-driven assets and increase allocations to quality. Investors should favor sectors with consistent earnings, low leverage, and stable dividends. Cash remains underappreciated as a strategic tool, and with real yields positive and volatility likely to rise, liquidity is a source of optionality.

The next two years will test the soft landing thesis. If growth falls short, earnings disappoint, or inflation returns, markets will face a reset. That reset may not be dramatic, but it will be painful for those overexposed to the current consensus.

The best defense is valuation discipline, risk awareness, and a willingness to question the prevailing narrative.

Trump's military strikes against Islamic terror groups in Nigeria have been met with overall applause by Nigerian citizens and migrants residing in the US.  Authorities say the groups have links to jihadist networks in Mali and Niger and their members have settled in border communities, recruiting young people and imposing brutal controls.

Associated Muslim militants were responsible for numerous attacks on Christian communities and schools in the country in early 2025, including the coordinated massacre of 280 Christian farmers in the village of Yelwata; many victims burned alive or hacked to death. It was one of the worst single incidents of Christian slaughter in the past decade.

In a national statement, Nigeria's information ministry said "precision strike operations" had been carried with the "explicit approval" of President Bola Tinubu and with "the full involvement of the armed forces of Nigeria".  Trump brought global exposure to the attacks on Christians in the region, accusing the Nigerian government of apathy in the face of genocide. 

The event is being framed as a "joint operation" between Nigeria and the US, however, it is likely that international attention forced the hand of the current regime to cooperate with US military operations.  Nothing would have been done about the militants had Trump not stepped in.

Many Christian Nigerians abroad and migrants in the US are optimistic about the country's prospects for peace and have applauded the strikes.  Nigeria is 56% Muslim and 43% Christian.  The northern provinces, controlled by Muslims, have instituted Sharia Law despite the country having a "secular constitution."  This has created religious tensions across the nation and helped to enable escalating Islamic militant attacks. 

It's good to see at least one group of third world migrants showing appreciation for US efforts.  

The establishment media in the west, however, is not happy about Trump's efforts in Africa, and has been working diligently to deny that the conflict is driven by religious motives.  Though they are forced to admit that the strikes have had a positive effect on Nigeria's Christian population, they continue to frame the killings of villagers as "land disputes" (take note of the seemingly scripted propaganda planted in the AP report below).

The motives of the media are obvious; third world immigration is an integral part of the multicultural agenda to destabilize the west and admitting that Islamic migrants might be a security hazard hurts that agenda.  They could not be more transparent, given the fact that journalists immediately tried to make the issue about immigration once news of the strikes hit the new feeds.

Western journalists have accused Trump of hypocrisy because of his block on immigration from a number of African nations including Nigeria.  They argue that Trump does not really want to help Christians because he won't allow Nigerians to come to the US to escape the sectarian violence.

However, simply claiming to be Christian is not enough to gain US citizenship.  Trump's position is clear - Third world populations need to fix their own countries rather than running to the US.  Despite the socialist "melting pot" narrative, America has never been obligated to take on the refugees of the world.  The Trump Administration's intervention in Nigeria only shows that the President is serious about those people staying where they are so they can repair or replace their broken government.   

In July as Trump ramped up criticism of the Nigerian government's handling of the situation, NPR attempted to paint the attacks as a "land dispute" over access to cattle grazing areas. They repeated the Nigerian Foreign Ministry's claims that the events had "nothing to do with religion."  In almost every case of Christians being hunted by Muslim militants, the media is on the side of the governments that allow the attacks to happen.   

A number of western media platforms dismiss or marginalize the attacks on Christian villages in Nigeria, claiming that "most victims are Muslims."  What they don't mention is that most Muslim "victims" are largely rival militants fighting for a superior position.  Christians have not involved themselves in the power struggle, yet, they are specifically targeted for extermination.  

Reports from the International Society for Civil Liberties and Rule of Law (Intersociety) state that over 7,000 Christians were killed in Nigeria in the first 220 days of 2025.  The bottom line is, Christians are disproportionately targeted by Islamic violence in Africa and African governments are content to let it happen.  

Update(1115ET): The Trump-backed effort to forge ahead on achieving peace in Ukraine may have just been completely derailed by a major development. Just as Trump described Monday morning that he had a 'positive' phone call with President Putin about Ukraine, the Kremlin is alleging that Ukraine launched a major drone attack on President Putin’s "official residence" in the Novgorod region from Sunday night into Monday. It is presumably one of many of his residences, and there's no indication he was there when the alleged attack wave occurred.

Fresh words of Russian Foreign Minister Sergei Lavrov indicate that Ukraine fired 91 drones targeting Putin's residence in what's being described as a sustained attack spanning hours, but that all of them were destroyed by the significant anti-air defenses.

PUTIN TOLD TRUMP ABOUT ATTACK ON ONE OF HIS RESIDENCES: IFX

Moscow now says it will "revise" its negotiating position on ending the war in Ukraine, after what it dubbed the overnight "terrorist attack." The Ukrainian government immediately rejected the allegation, calling it a "fabrication":

Lavrov said there was no damage or casualties resulting from the incident but that Russian armed forces had selected targets for “retaliatory strikes.” Ukrainian President Volodymyr Zelensky immediately rejected the claim as “a complete fabrication” from Russia.

Russian Foreign Minister Sergey Lavrov blames Ukraine for an attempted drone attack on Putin's "Dolgiye Borody" residence in Valday, Novgorod Oblast of Russia on the night of December 29.

Lavrov:

??? "Russia's negotiating position will be revised taking into account the Kyiv… pic.twitter.com/GurqsmcYgp

— Status-6 (Military & Conflict News) (@Archer83Able) December 29, 2025

There's a likelihood that the capital of Kiev is going to have a bad night, as this means more missiles and drones could rain down on the city once again, possibly even targeting key government headquarters buildings - as happened at least once before.

* * *

European defense stocks moved lower on Monday after President Trump and Ukrainian President Volodymyr Zelensky made progress in talks aimed at ending the Russia-Ukraine conflict.

On Sunday evening, after the talks, Trump told reporters, "I do think we're getting a lot closer, maybe very close."

Zelensky told reporters the peace talks were a "really great discussion" in which U.S.-Ukraine security guarantees were "100% agreed" upon. He added, "We agree that security guarantees are a key milestone in achieving lasting peace."

Zelensky said Trump will host another meeting next month with Ukrainian and European officials to advance a peace deal that is nearing completion. Trump confirmed that he spoke with Russian President Vladimir Putin ahead of the Zelensky talks and plans to hold another call with Putin.

The full summary of the Trump-Zelensky "great meeting" is available here.

The Goldman Sachs European Defense Index fell by roughly 2% on Monday following overnight developments.

Larger timeframe. 

Since Russia invaded Ukraine in early 2022, the GS European Defense Index has delivered outsized annual returns.

UBS analyst Tricia Wright commented on the moves:

"Defense stocks were among the top fallers in Europe after the Trump-Zelensky meeting. The Italian defense group Leonardo declined by 4.4%, topping the STOXX Europe 600 fallers list, while Germany's Rheinmetall and Hensoldt were both down by about 3%. Talks to end the Ukraine war on Sunday spurred fresh optimism from U.S. President Trump, yet there are no clear signs that the two sides have reached a breakthrough, as Russia continues to push for land gains and reject a ceasefire," The Wall Street Journal reported.

Even as a potential peace deal in Eastern Europe nears, we expect defense stocks to remain elevated given record defense spending.

UN Secretary-General António Guterres recently wrote in a report on the rise in military expenditure: "The world is spending far more on waging war than on building peace."

Pending sales of existing homes in the US surged 3.3% MoM (more than the expected 0.9% MoM move) in November as a modest improvement in prices and mortgage rates encouraged buyers.

The gain was broad-based across regions and exceeded all but one estimate in a Bloomberg survey of economists, but left the YoY change in sales somewhat stagnant on an NSA basis.

Signings have now increased for four straight months, matching a streak seen during the frenzied housing market of the pandemic.

“Homebuyer momentum is building,” NAR Chief Economist Lawrence Yun said in a statement, citing improving affordability and more inventory choices compared to last year.

The trade association’s report on Monday showed contract signings rose in each US region last month to their highest levels of the year. The West posted the largest increase, followed by the South, the nation’s largest home-selling region.

November's surge dragged the Pending Home Sales Index to its highest since Feb 2023...

Bloomberg reports that the recent data point to the gradual improvement many economists see for the housing market into 2026.

Mortgage rates that were close to 7% in May have since settled in the 6.3% to 6.4% range, and home prices are growing at a much slower rate compared to last year.

That’s helped fuel small gains in contract closings in recent months. However, economists and industry experts have widely different expectations for next year.

In a recent survey of nine market analysts, estimates for the home resale market ranged from 1.7% to 14% sales growth, with the rosiest projection coming from NAR’s Yun.

Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.
 

There were no substantial breakthroughs in the latest Trump-Zelensky talks on Ukraine peace at Mar-a-Lago resort on Sunday, and fresh reporting on Monday reveals why.

A major point of disagreement remains security guarantees. Ukraine has been pushing maximalist demands for something akin to NATO Article 5 protections. It would be like getting all the benefits of being in NATO but without being a formal member of the Western military alliance.

The Ukrainian side has revealed that President Trump had offered security guarantees for 15 years following a peaceful settlement, but Zelensky considered this much too short to protect from future potential Russian aggression.

But in classic Zelensky fashion, he wants way more than this. Also, maximalist demands are something that European leaders have backed him on all along - and they may have even put him up to. According to The Wall Street Journal:

Kyiv had asked for security guarantees to last up to 50 years after the end of the conflict during weekend discussions. In the documents currently being discussed, the U.S. offered a 15-year guarantee with the possibility of extension, Zelensky said in audio messages to journalists on Monday.

That's half a century! Would Congress and the American public sign off on this? Congressional hawks like Lindsey Graham surely would, but others might not want to be hitched to the Ukraine wagon for yet decades more to come.

"We have been at war for almost 15 years, and therefore we would very much like the guarantees to be longer," Zelensky has disclosed that he told Trump. "And I told him that we would very much like to consider the possibility of 30, 40, 50 years, and that this would then be a historic decision by President Trump."

As for Trump, he has said he "would think about it" and further that "There will be a security agreement, it’ll be a strong agreement and the European nations are very much involved."

But alas there's been no agreement.

Last week we detailed that Zelensky actually wants to keep the contents of any US-Ukraine security deal a secret. He ultimately would like to bypass the American public and thus potential criticism by keeping the future deal's contents from public knowledge.

"There is a separate document between us and the United States – bilateral security guarantees," the Ukrainian leader wrote on X a week ago. "This is what we see: they must be reviewed by the U.S. Congress, with certain details and annexes remaining classified."

The American people might have something to say about that, especially on a 'classified' backroom deal which could drag future generations into war with nuclear-armed Russia.