With the last trading session of the year on deck, investors are sketching their market predictions for 2016. Which sectors will be hot? Will oil and other commodities stage a comeback? How about diverging monetary policies in the U.S. and EU, including the pace of future rate hikes? Trade agreements? Growth in China, war in the Middle East, more geopolitical tensions? Will the U.S. presidential election influence the markets? Any other stock-related tea leaves?

Economy

Puerto Rico won't be making two of its thirteen debt payments due tomorrow - a $35.9M payment on the territory's Infrastructure Financing Authority and a $1.4M payment to its Public Finance Corporation. The rest of the nearly $1B in payments will be made, including one to general obligation bondholders (in which half of the payment comes from revenues clawed back from other bonds). Monoline insurers Ambac (NASDAQ:AMBC), MBIA (NYSE:MBI), and Assured Guaranty (NYSE:AGO), each of which have Puerto Rican exposure, are in focus.

The Obama administration is preparing to impose its first financial sanctions on Iran since it forged a landmark nuclear agreement in July, presenting a major test for whether Tehran will stay committed to the deal. The penalties would target about 12 companies and individuals for their alleged role in developing Iran's ballistic-missile program, which has conducted two test firings over the past few months. While the U.S. maintains its rights to blacklist Iranian entities suspected of involvement in missile development, Iranian officials have warned that Supreme Leader Khamenei would view such sanctions as violating their nuclear accord.

Oil is set for its first back-to-back annual loss since 1998 after record U.S. inventories data on Wednesday reinforced worries about a global supply glut. Crude stocks rose by 2.6M barrels last week, the U.S. Energy Information Administration said, raising additional concerns after OPEC effectively abandoned output limits at a meeting earlier this month. While WTI has tumbled over 30% this year to under $37/bbl, are headwinds or tailwinds growing for 2016?

Gold's image as a safe haven asset is also getting tarnished as the metal heads for its third-straight annual loss and its longest slump since 2000. It's down 10% this year following a 1.4% drop in 2014 and a 28% loss in 2013. The decline comes as the dollar continues to surge on the back of monetary policy tightening in the U.S and a collapse in commodity prices from iron ore to oil.

Stocks

Microsoft is shaking up its stance on hacking alerts, flying a red flag to users if it suspects a foreign government is tapping into their accounts or emails on Outlook.com. Microsoft's (NASDAQ:MSFT) policy shift follows similar moves since October by Internet giants Facebook (NASDAQ:FB), Twitter (NYSE:TWTR) and most recently Yahoo (NASDAQ:YHOO). Google (GOOG, GOOGL) pioneered the practice in 2012 and said it now alerts tens of thousands of users every few months.

Yahoo is quietly shopping a massive, 48.6-acre development site it owns in Santa Clara not far from Levi's Stadium, the Silicon Valley Business Journal reports. The property was acquired for $106M in 2006, but given the recent surge in Bay Area real estate prices, the company might turn a profit on a sale. The need to raise cash caps a tumultuous year for Yahoo (YHOO) as it struggled to deal with flagging ad sales, rotating executive ranks and a plan to spin off its core Internet business.

Weight Watchers got some more of "The Oprah Effect" on Wednesday. The stock soared 19% after the company launched its first advertising campaign featuring the star. Winfrey previously bought a 10% stake in Weight Watchers (NYSE:WTW), about 6.4M shares, in October. Despite the move, Wall Street isn't particularly bullish on WTW at current levels with an average price target of $17 in place.

U.S. District Judge Jesse Furman has rejected General Motors' (NYSE:GM) bid to dismiss the first so-called "bellwether" case over its defective ignition switches, clearing the way for a Jan. 11 trial. Plaintiff Robert Scheuer sued GM after another vehicle forced him off an Oklahoma highway on May 28, 2014, causing him to crash head-on into two trees. His Saturn Ion's front airbags did not deploy, which he said resulted from a defective ignition switch.

The Pentagon has awarded Lockheed Martin a $1.1B contract for 32 C-130J transporter aircraft. The planes are able to touch down on austere landing zones - essentially makeshift runways - and are often used for humanitarian relief missions, special operations, aerial refueling, close air support and search and rescue undertakings. Work on the project is expected to be complete by April 2020. LMT +0.4% premarket.

General Electric will separate its renewable energy arm from its power division, following the acquisition of Alstom's (OTCPK:ALSMY) energy business. The new unit, called renewable energy, will include wind- and hydro-power businesses acquired from Alstom. GE is also moving a part of its distributed power business, which makes turbines, to its oil and gas unit.

Evacuate! BP ordered the departure of staff from its North Sea Valhall oilfield this morning as a large unmanned barge broke anchor and drifted towards drilling platforms. "The barge has changed direction and BP has decided to shut production...there are 71 people left on the platform and they are being evacuated as we speak," a BP spokesman told Reuters.

Chicago police will get new equipment and training to defuse tense situations and limit use of lethal force, Mayor Rahm Emanuel said on Wednesday, following weeks of protests calling for him to resign. The number of Tasers (NASDAQ:TASR) of the police department will now be doubled to 1,400 so that every patrol unit going out at night has one. City officials have been recently slammed by critics over the police's culture of "shoot first and ask questions later" amid a recent spate of fatal shootings.

How many bank jobs have vanished since the financial crisis? Announced cuts in the fourth quarter totaled at least 47K, following 52K lost jobs in the first nine months of 2015. That would put the aggregate figure since 2008 at about 600K, according to Bloomberg. Staff reductions at some of the world's biggest banks are still far from over. Notables: Deutsche Bank (NYSE:DB) plans to slash 26K positions by 2018, UniCredit (OTC:UNCFY) will eliminate about 18,200 positions, and Citigroup (NYSE:C) plans to eliminate at least 2,000 more jobs next year.

Fairholme Capital's Bruce Berkowitz, the largest outside shareholder at Sears (NASDAQ:SHLD), has been taking a more activist role at the company. According to regulatory filings, Fairholme funds have bought about 1.45M shares in the retailer this month, taking their total shares to 27.8M, or the equivalent of a 26% stake. Representatives will also "be in contact" with Sears regarding views of the company's long-term prospects, which "may include proposing or considering" actions.

The International Consumer Electronics Show, known universally as CES, is scheduled to kick off next week, offering its 150K attendees a glimpse into the future. But unlike many prior years, there's no single large overriding theme. Notable showcases: "Internet of Things" products, smart home solutions, automaker developments, tech wearables, virtual reality and consumer drones.

Today's Markets

In Asia, Japan closed. Hong Kong +0.2% to 2914. China -0.9% to 3539. India +0.6% to 26117.
In Europe, at midday, London -0.3%. Paris -0.5%. Frankfurt -1.1%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq =0.1%. Crude +0.4% to $36.74. Gold +0.2% to $1061.50.
Ten-year Treasury Yield -1 bps to 2.29%

Today's Economic Calendar

8:30 Initial Jobless Claims
9:45 Chicago PMI
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Baker-Hughes Rig Count
4:30 PM Money Supply
4:30 PM Fed Balance Sheet