Dec 24, 2018

Axios PM

By Mike Allen
Mike Allen

Good afternoon. Per Norad, Santa is currently visiting Egypt.

1 big thing: Wall Street's not so Merry Christmas

Screenshot: CNBC

82 days ago, the Dow closed at a record high — 26,828 — on a day where this newsletter focused on the Khashoggi coverup and the power shift driven by #MeToo.

But that was a few roller coaster rides ago.

  • The Dow had its worst Christmas Eve ever, dropping 653 points to close at 21,792.
  • All 11 of the S&P 500 sectors are now in negative territory in 2018, Bloomberg reports.

Why it matters: Treasury Secretary Steven Mnuchin's unsettling weekend statement that the big banks have enough liquidity clearly didn't calm anyone down, Axios' Justin Green notes.

  • Prudential Financial strategist Quincy Krosby: “We’ve gone through situations before where it’s absolutely normal for the secretary of Treasury to reach out to the private sector... But what’s bad is this made the papers, and says the government is very worried." [WSJ]
  • "Mnuchin convened a call [today] with top regulatory officials ... to discuss coordination efforts to assure normal market operations. Regulators on the call said that markets were functioning normally..." [WSJ]

What they're saying:

  • Trump: "The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!"
  • Chuck Schumer and Nancy Pelosi: '"It's Christmas Eve and President Trump is plunging the country into chaos. The stock market is tanking and the president is waging a personal war on the Federal Reserve..."

Be smart, via Axios' Courtenay Brown: We’ve transitioned from a glass half-full bull market to a glass half-empty environment. This is much different than earlier this year when no amount of bad news could shake the market. Now it’s the opposite: good news isn’t as powerful as it used to be.

The bottom line: “The markets going down will eventually create an economic problem... People who spend money as consumers, if they have stock exposure, they’re reconsidering if they’re going to buy a $1,000 present — they’ll buy a $200 one.” [Bloomberg]

Bonus: Pic du jour
Photo: Mark Hawkins/Barcroft Images via Getty Images

Wales Air Ambulance flies Santa into children's hospice Ty Hafan to visit children on Christmas Eve.

2. What you missed
  1. Even the most high-ranking U.S. military officials are reportedly unsure what they should be telling their troops on the ground about Syria. Go deeper.
  2. The Indonesia tsunami death toll has risen: 373 people are dead and 1,400 injured after an eruption on Indonesia's Anak Krakatau volcano. Photos.
  3. Japan experienced its largest natural population decline ever in 2018, CNN reports, with a record-low birthrate and deaths hitting a post-war record high.
  4. Israel will hold early elections on April 9th, 2019. The elections were supposed to be in November 2019. Go deeper.
  5. A federal judge has ordered North Korea to pay the family of Otto Warmbier $500 million in a wrongful death lawsuit.
  6. "Kevin Spacey has posted a video online in character as his 'House of Cards' role," the AP reports. “I’m not going to pay the price for things I didn’t do," he says. Video.
3. Another Santa pic
Photo: James D. Morgan/Getty Images

Santa holds two dogs as he poses for a photograph at Luna Park in Sydney, Australia.

Mike Allen