Market opens lower again on this Christmas Eve. This relentless selling continues. The illiquidity of the holiday season is certainly playing a role as well as normal tax selling, but this has been no normal run for stocks. Sentiment has plummeted and though earnings and economic growth continue, the rate is shrinking and the Market is suggesting a recession could be much sooner than thought. Things are not healthy. Compounding the problems are questionable and concerning events out of Washington. This is much more than frustration with the Fed, which triggered the next leg down. President Trump has been rumored to want to fire the Fed Chair for his handling of current monetary policy. The President’s rash decision to leave Syria led to the resignation of Defense Secretary Jim Mattis, who has long been considered the adult in the Cabinet that could maintain order overseas while chaos continues in the Oval Office. That can no longer be said. Concerns are mounting with the level of instability from the President. Yesterday, it was reported that Treasury Secretary Steve Mnuchin called an emergency call with CEOs of the largest banks to ensure proper liquidity. The question is, why? There is no sign of credit stress in the system so it raised concerns that something else bigger might be going on than known. It just seems that those in charge, from the President to the Fed Chair to the Treasury Secretary have not only not helped the situation, but in fact have contributed to the panic selling. The government shutdown is not helping either. It’s a shortened holiday trading day, with little news flow outside of the Market. Volume will be low, and price action is taking things even lower. This has been the worst December in decades. Last week was the worst week since the Financial Crisis.
Have a great morning,
Mike Frazier
