Grind for December 30th, 2018
“He who wishes to be rich in a day will be hanged in a year.”
– Leonardo da Vinci
Stock market suffers in anticipation of government shutdown
The week of December 16th saw US stocks suffer one of the worst weekly declines in a decade amid fears of a government shutdown.
All three indexes closed lower, with the Dow and Nasdaq recording their largest weekly drops since 2008.
— The Dow Jones fell 6.8%
— The Nasdaq dropped 8.36%
— The S&P 500 fell 7%
Big tech firms suffered some of the most bruising falls, with Twitter and Facebook dropping more than 6% on Friday. Amazon fell more than 5% and Microsoft and Apple dropped more than 3%.
Other factors in the decline include an interest rate hike by the US Federal Reserve and signs the Trump Administration will fail to negotiate an agreement with China.
The Fed this week also revised its predictions for economic growth in 2019 to 2.3%, down from an earlier forecast of 2.5%.
“China is cooling and the Eurozone is slowing down, and some of the economic indicators from the US have been a bit soft recently, but yet the Fed hiked rates and suggested that two more interest rate hikes were lined up for 2019,” said Michael Hewson, chief markets analyst at CMC Markets.
On the flip side, consumer sentiment and US economic growth remain strong, with the latter metric revised down to 3.4% for Q3.
Another Trump Administration official resigns
Joining the long list of Trump Administration resignations is Defense Secretary Jim Mattis, who quit Thursday after failing to persuade Trump to reconsider his decision to withdraw US troops from Syria.
Trump made the announcement about Syria on Wednesday without informing Pentagon officials.
With resignations from Jim Mattis and Nikki Haley, Mike Pompeo, is the only top national security or diplomatic policy adviser remaining from Trump’s first days in office. Pompeo was pulled from his position as CIA Director in April to replace Sec. of State Rex Tillerson (who was fired by Trump).
Jim “Mad Dog” Mattis is a former Marine Corps general who earned his Senate confirmation for the position of Defense Secretary the same day Trump took office (January 20th, 2017).
During his time in the White House, Mattis frequently stressed Russia’s threat to the world and opposed proposed collaboration with Moscow on military matters. He also opposed Trump’s withdrawal from the JCPOA.
In his resignation letter, Mattis admitted he could no longer continue executing Trump’s policies and stressed the importance of alliances like NATO.
“Because you have the right to have a Secretary of Defense whose views are better aligned with yours…I believe it is right for me to step down from my position,” wrote Mattis.
Trump on Twitter thanked Mattis for his service and said he would name a replacement soon.
“General Jim Mattis will be retiring, with distinction, at the end of February, after having served my Administration as Secretary of Defense for the past two years,” tweeted Trump, adding that Mattis was “a great help to me in getting allies and other countries to pay their share of military obligations.”
GOOD TO THE LAST DROP:
Did you know… Daizi Zheng, a Chinese designer, made a Coca-Cola powered cell phone. She designed a battery that uses enzymes to generate electricity from the carbs.