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🎙"Men who look upon themselves born to reign, and others to obey, soon grow insolent ... and the world they act in differs so materially from the world at large, that they have but little opportunity of knowing its true interests, and when they succeed to the government are frequently the most ignorant and unfit of any throughout the dominions." - See who said it and why it matters at the bottom.

1 big thing: The Fed plans to keep pumping cash

Illustration: Aïda Amer/Axios

The New York Fed added $83.1 billion in temporary liquidity to financial markets Thursday, and the U.S. central bank looks primed to keep pumping cash for at least the next few months.

Why it matters: The stock market's 30% gain in 2019 was in no small part backed by the Fed's decision to cut U.S. interest rates three times and inject more than $1 trillion of temporary financing into the repo market. It also added more than $400 billion to its balance sheet in the fourth quarter.

What we're hearing: Fed vice chair Richard Clarida told an audience assembled at the Council on Foreign Relations Thursday that the Fed was prepared to continue adding to its balance sheet and providing liquidity to the repo market "at least through April."

  • Clarida told me after the event he was not concerned markets could be taking advantage of the so-called Powell put — the belief that the Fed and chair Jerome Powell are using the cash to stimulate the economy or that they will cut rates to juice the stock market if prices fall significantly.
  • "We realize that sometimes we’ll be criticized for it, but it’s not a factor driving our decisions," he said. "We have a very clear mandate, and are focused on what we need to do."

What they're saying: Clarida's speech was "music to the ears of traders and investors who have profitably ridden a liquidity-driven rally that has allowed them to quickly overcome a set of shocks, including the latest one, the sudden escalation of the U.S.-Iran conflict," Mohamed A. El-Erian, chief economic adviser at Allianz SE, wrote in an opinion piece for Bloomberg.

What's next: While Clarida pointed to April because of Tax Day, analysts who watch the market closely expect the Fed to keep delivering cash for even longer.

  • Priya Misra, head of global rates strategy at TD Securities, a primary dealer that does business directly with the Fed, told Axios she expects the central bank to add $100 billion–$200 billion more in reserves and continue its Treasury bill buying through July to about $500 billion.
  • In a note to clients, she added that she expects the Fed's balance sheet to move above $4.4 trillion this year, near its all-time high.
2. Catch up quick

Boeing released a new batch of internal messages in which company employees described the 737 MAX jet as "designed by clowns, who in turn are supervised by monkeys.” (Bloomberg)

California could become the first state to contract with generic drug manufacturers to sell prescription medicines to residents. (AP)

Iran has invited Boeing and Ukraine to take part in the investigation into the aircraft that crashed after U.S., Canadian and U.K. officials said they believe the jet was downed (possibly accidentally) by an Iranian missile. (AP)

Taco Bell will offer a $100,000 salary to new restaurant managers in select U.S. locations in the Midwest and Northeast. (Bloomberg)

"At the top of the income distribution, our research shows that marginal tax rates can be raised without sacrificing economic growth." (IMF)

3. Wall Street expects another booming jobs report
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Data: Bureau of Labor Statistics; Chart: Naema Ahmed/Axios

Economists predict the U.S. added around 160,000 jobs last month but many on Wall Street are expecting another blowout number, following the 266,000 jobs added in November.

Why it matters: The pace of job growth in 2019 slowed from the prior year, but a winter pickup could signal that the labor market gained momentum going into 2020.

  • It would be a strong sign that the negative impact from the trade war has subsided and the U.S. economy is on even stronger footing.

What happened: The ADP private payrolls report showed a better-than-expected 202,000 jobs added for December after a weak November report, and the number of Americans filing for unemployment benefits fell unexpectedly last week to 214,000 — well below the historical average.

What they're saying: "The downward trend in unemployment likely will continue; 60-year lows coming soon," Pantheon Macroeconomics chief economist Ian Shepherdson said in a note to clients. "Low unemployment is finally emboldening employees to push for bigger wage increases."

  • Goldman Sachs analysts called for "a rebound in retail job growth related to the late Thanksgiving, and a weather-related rebound in the Midwest after winter storms during the November survey period."
  • In a note, Goldman added that "December job growth tends to remain strong in tight labor markets, as labor supply constraints may incentivize firms to reduce end-of-year layoffs."

Yes, but: The six-month average for payrolls prior to November's big jump was 162,000, DRW Trading rates strategist Lou Brien says in a note, and December is no longer the primary month for holiday retail hiring — it's moved to October and November.

  • Retail hiring in December of 2018 and 2017 averaged just 19,000, "the lowest totals for any months in the history of the survey, dating back to 1939."
4. Retail's rough ride
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Data: FactSet; Chart: Axios Visuals

The U.S. stock market rose broadly on Thursday, but a number of retail stocks went south after companies revealed distressing news about their holiday sales.

What happened: J.C. Penney and Kohl’s reported lower sales during the critical months of November and December, and Macy's announced poor holiday sales and the closure of several stores.

The intrigue: All three counted significant losses to their share prices, but nothing compared to Bed, Bath and Beyond, which saw its stock fall 19% during yesterday's session.

  • BBBY said its fiscal third quarter sales were significantly impacted by the calendar shift of Thanksgiving that resulted in one less week of holiday sales and it withdrew its 2019 fiscal year guidance.
  • The company said it expects sales and profitability to remain subdued.

Flashback: We reported in November that BBBY was one of a handful of retail giants that has refused to accept tariff price increases from their brand suppliers, telling the companies they will have to either eat the tariff costs or find another buyer.

5. Australian stock market hits record high amid deadly fires

Facing unprecedented wildfires that have claimed at least 27 lives, destroyed more than 2,000 homes, and scorched much of the country's southeast, Australia's stock market has somehow been one of the world's top performers, and touched a record high today.

By the numbers: The benchmark S&P/ASX 200 index rallied nearly 1% to close at 6929, surpassing the previous intraday record high.

  • The index has risen close to 3% this week and is up 3.7% year to date, trailing only Chile's IPSA index among major global stock markets, according to FactSet.
  • Of the 200 companies in the ASX index, 138 rose during the session, the Sydney Morning Herald reported.

What happened: Despite the grim news on the ground, Australia had a strong retail sales report for November and also has benefited from easing tension in the Middle East and increased Chinese stimulus measures. (Australia is a major trading partner with China.)

On Jan. 10, 1776, Thomas Paine published “Common Sense” advocating independence for the 13 colonies from Britain. It is considered one of the most influential pamphlets in American history.