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Illustration: Lazaro Gamio/Axios

The U.S. stock market has seesawed in the new year, following a chaotic end to 2018 — its worst annual performance since the Great Recession and worst December performance since the Great Depression. The magnitude of recent swings suggests they are driven less by economic and market conditions than by geopolitical challenges.

Why it matters: Market actors focus, sometimes myopically, on technical indicators like “moving averages” or what the Fed will do on interest rates. But the current turbulence requires factoring in critical geopolitical trends like the rise of illiberalism in Europe, Trump administration trade policies, and China’s Belt and Road initiative.

Global geopolitical tensions are already impacting trade and business.

Together, these trends are eroding faith in pillars of global governance (NATO, UN, EU, WTO, and more) and social institutions, which contributes to market volatility and unpredictability.

Meanwhile, intensified polarization in the U.S. has led to standoffs like a partial government shutdown over a border wall dispute that threaten the economy and national security.

  • The economic power of the U.S. could decline as its debt and the associated costs mount, in the absence of effective congressional leadership.

Yes, but: In the U.S., some pillars of democracy — the federal judiciary, intelligence and law enforcement communities, a reinvigorated media, and grassroots political movements — have helped counter other risks.

The bottom line: These geopolitical trends erode trust, increase market volatility and dampen investment. If the U.S. pulls out of its current malaise, particularly after the 2020 elections, more effective governance could help correct the current course. It could also serve as an example to improve stability elsewhere, especially through international cooperation.

Andrea Bonime-Blanc is the founder and CEO of GEC Risk Advisory and author of the forthcoming book “Gloom to Boom: How Leaders Transform Risk into Resilience and Value.”

Go deeper

Scoop: Gina Haspel threatened to resign over plan to install Kash Patel as CIA deputy

CIA Director Gina Haspel. Photo: Win McNamee/Getty Images

CIA Director Gina Haspel threatened to resign in early December after President Trump cooked up a hasty plan to install loyalist Kash Patel, a former aide to Rep. Devin Nunes (R-Calif.), as her deputy, according to three senior administration officials with direct knowledge of the matter.

Why it matters: The revelation stunned national security officials and almost blew up the leadership of the world's most powerful spy agency. Only a series of coincidences — and last minute interventions from Vice President Mike Pence and White House counsel Pat Cipollone — stopped it.

Updated 11 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus deaths reach 4,000 per day as hospitals remain in crisis mode — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden says, "We will manage the hell out of" vaccine distribution — Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan — Widow of GOP congressman-elect who died of COVID-19 will run to fill his seat.
  3. Vaccine: Battling Black mistrust of the vaccines"Pharmacy deserts" could become vaccine deserts — Instacart to give $25 to shoppers who get vaccine.
  4. Economy: Unemployment filings explode againFed chair: No interest rate hike coming any time soon —  Inflation rose more than expected in December.
  5. World: WHO team arrives in China to investigate pandemic origins.

John Weaver, Lincoln Project co-founder, acknowledges “inappropriate” messages

John Weaver aboard John McCain's campaign plane in February 2000. Photo: Robert Schmidt/AFP via Getty Images)

John Weaver, a veteran Republican operative who co-founded the Lincoln Project, declared in a statement to Axios on Friday that he sent “inappropriate,” sexually charged messages to multiple men.

  • “To the men I made uncomfortable through my messages that I viewed as consensual mutual conversations at the time: I am truly sorry. They were inappropriate and it was because of my failings that this discomfort was brought on you,” Weaver said.
  • “The truth is that I'm gay,” he added. “And that I have a wife and two kids who I love. My inability to reconcile those two truths has led to this agonizing place.”