Morning Brew - Fri Dec 21 BOOM

STOCKS The Stock Market Mourns the Last Brew for 2018

 

Stub your toe getting out of bed this morning? Burn your tongue on your cappuccino? Could be worse—you could be the stock market. It was another face palm-inducing day on Wall Street, where volatility has become as commonplace as Patagonia vests. Let's survey the damage. The S&P 500 is now at a 15-month low, and member companies have shed a combined $2.39 trillion in market cap...just this month. The Dow has now lost more than 1,700 points in the last five sessions and sits at a 14-month low. The tech-heavy Nasdaq flirted with bear market territory (down close to 20% from its recent high). So what caused the headache? Well, (as always) it was likely a mix of symptoms. First up? The possibility of a government shutdown. House Speaker Paul Ryan said President Trump will not sign a temporary funding bill to avoid a partial government shutdown without the promise of funding for a U.S.-Mexico border wall. The House did approve a bill complete with more than $5 billion for the wall late Thursday, but it's unlikely the measure will make it through the Senate. Making matters worse? The market's still reeling from the Fed's decision to raise interest rates Wednesday. Fed chief Jerome Powell cited strong economic data, but that wasn't enough to keep investors from longing for the easy-money, low-interest-rate days. "We've been living on this morphine drip that is now being taken away," Fort Pitt Capital's Charlie Smith told the WSJ. Feels fitting to cap the year this way Remember the good ol' days? When we were talking markets-at-new-highs, record-earnings? Those days are gone. Unfortunately, your last Brew of the year tastes a little bitter. Rip off the Band-Aid: The trade war has actually come to pass, the nearly decade-long bull market is losing steam, and global economic expansion isn't what it used to be. That's spooked investors...who've taken their worries out on growth-sensitive stocks.