Wall Street's not so Merry Christmas
New York Stock Exchange. Photo: Drew Angerer/Getty Images
The Dow had its worst Christmas Eve ever, dropping 653 points to close at 21,792 — and 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.
Flashback: 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.
Driving the news: "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]
- 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]
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: 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]