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Wall Street notches best day in 10 years in holiday rebound

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Wall Street notches best day in 10 years in holiday rebound

Stocks rocketed on Wednesday in Wall Street’s best day in 10 years, snapping a stomach-churning, four-day losing streak and giving some post-Christmas cheer to a market that has been battered this December.

The Dow Jones Industrial Average shot up more than 1,000 points — its biggest single-day point gain ever — rising nearly 5 percent as investors returned from a one-day Christmas break. The broader S&P 500 index also gained 5 percent, and the technology-heavy Nasdaq rose 5.8 percent.

But even with the rally, the market remains on track for its worst December since 1931, during the depths of the Depression, and could finish 2018 with its steepest losses in a decade.

“The real question is: Do we have follow-through for the rest of this week?” said Sam Stovall, chief investment strategist for CFRA.

Technology companies, health care stocks and banks drove much of the broad rally. Retailers also were big gainers, after a holiday shopping season marked by robust spending. Amazon had its biggest gain in more than a year.

Energy stocks also rebounded as the price of U.S. crude oil posted its biggest one-day increase in more than two years.

But what really might have pushed stocks over the top was a signal from Washington that President Donald Trump would not try to oust the chairman of the Federal Reserve.

Trader Michael Milano works on the floor of the New York Stock Exchange, Wednesday, Dec. 26, 2018.(AP Photo/Richard Drew)

Trader Michael Milano works on the floor of the New York Stock Exchange, Wednesday, Dec. 26, 2018.(AP Photo/Richard Drew)

In recent days, Trump’s tweet attacks on the Fed and chairman Jerome Powell for raising interest rates stoked fears about the central bank’s independence, unnerving the market.

The partial government shutdown that began over the weekend also weighed on the market, as did personnel turmoil inside the Trump administration, trade tensions with China, the slowing global economy and worries that corporate profits are going to slip sooner or later.

The Dow lost 1,883 points over the prior four trading sessions and is still down 2,660 for December.

Wednesday’s gains pulled the S&P 500 back from the brink of what Wall Street calls a bear market — a 20 percent tumble from an index’s peak. Another day of heavy losses would have marked the end of the longest bull market for stocks in modern history — a run of nearly 10 years.

The S&P is now down 15.8 percent since its all-time high on Sept. 20.

All told, the S&P 500 rose 116.60 points Wednesday, or 5 percent, to 2,467.70. The Dow soared 1,086.25 points, or 5 percent, to 22,878.45. The Nasdaq gained 361.44 points, or 5.8 percent, to 6,554.36. The Russell 2000 index of smaller-company stocks picked up 62.89 points, or 5 percent, at 1,329.81.

Trading volume was lighter than usual following the holiday. Markets in Europe, Australia and Hong Kong were closed.

Among tech stocks, Adobe rose 8.7 percent. Credit card company Visa climbed 7 percent, and Mastercard was up 6.7 percent. Among big retailers, Amazon rose 9.4 percent, Kohl’s 10.3 percent and Nordstrom 5.8 percent.

Most economists expect growth to slow in 2019, though not by enough to cause a full-blown recession. Unemployment is at 3.7 percent, the lowest since 1969. Inflation is tame. Pay has picked up. Consumers boosted their spending this holiday season.

Specialist Mario Picone works on the floor of the New York Stock Exchange, Wednesday, Dec. 26, 2018. (AP Photo/Richard Drew)

Specialist Mario Picone works on the floor of the New York Stock Exchange, Wednesday, Dec. 26, 2018. (AP Photo/Richard Drew)

The market apparently got a lift Wednesday when Kevin Hassett, chairman of the White House Council of Economic Advisers, said in an interview with The Wall Street Journal that the Fed chairman is in no danger of being fired.

The president could help restore some stability to the market if he “gives his thumbs a vacation,” Stovall said. “Tweet things that are more constructive in terms of working out an agreement with Democrats and with China. And then just remain silent as it relates to the Fed.”

___

AP Economics Writer Josh Boak contributed to this story from Washington.

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Economy

Most Americans must pull their heads out of the sand on the national debt

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Most Americans must pull their heads out of the sand on the national debt

How do you stop any conversation at a cocktail party in America? Bring up the national debt. Boredom will overcome everyone listening as the complacency associated with a very simple topic that has been rendered falsely complicated sets in. Everyone will go glassy-eyed. People will nod in agreement while simultaneously not listening to anything you’re saying.

That’s the state of the national debt in the collective consciousness of Americans. Ask if it’s a problem and everyone will agree. Ask if it needs an immediate solution and most everyone will agree. Ask how they’ve voted to fix the problem or how they’ve demanded their leaders address the issue, and suddenly the drinks in their hands become much more interesting than they were moments before.

The problem with the debt isn’t that people don’t know about it. It’s that they just don’t care. Every American alive today who has paid even a little attention to the news in their lives has heard about the crippling effects of the national debt ever since the first real warning bells were sounded. Those bells rang out following the passage of the New Deal when expected GDP growth didn’t match expenditure growth. The result was the debt breaching the 40% mark of GBP. It was the end of the world for many economists who saw no way out.

At the time the national debt was 40% of GDP at $34 billion. Today, it’s 106% of GDP at nearly $23 trillion.

This is a problem that has no face, no tangible effects on the population, and no easy solutions. Entitlement reform is grossly unpopular, yet absolutely necessary to even start the process of fixing our debt issue. But entitlement reform would mean politicians would lose elections, most likely Republicans. Most of them have no intention of taking on something that’s desperately necessary yet immensely unpopular.

The Manhattan Institute’s Brian Riedl took to PragerU to discuss the omnipresent problem that nobody likes to think about. We need to start thinking about it immediately. Otherwise, the problem will “solve” itself.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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Democrats

More is never enough: AOC calls Amazon’s $15 per hour minimum wage ‘starvation wages’

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More is never enough AOC calls Amazons 15 per hour minimum wage starvation wages

What is the limit to how high many Democratic Socialists like Representative Alexandria Ocasio-Cortez want the minimum wage to go? More. It doesn’t matter how high it is. They’ll always want it to be higher. Never mind the economic consequences of increased costs. Does anyone really care if her policies would shut down many if not most small businesses? What’s wrong with exponential inflation as a result of devaluing wages by forcing the lowest level employees to make as much or more than skilled employees?

It’s all just details to Democratic Socialists. They want to attack the rich and destroy the poor. At least that’s what their policies would do whether they’re willing to acknowledge it or not.

The latest victim of AOC’s wrath is an old foe: Amazon. She and other socialists like Senator Bernie Sanders have been going after Amazon for a while. The latest insult hurled by the freshman Congresswoman is also an old one, though with new wording. She accused the e-commerce giant of paying their employees “starvation wages.”

Here’s the problem. Amazon has a self-imposed minimum wage of $15, the number Sanders, Ocasio-Cortez, and other Democrats have tossed out as the value they want for the national minimum wage. Amazon complied, but it wasn’t enough. In fact, they pay many of their workers higher and noted in a statement that they pay more as a starting point for employees in Staten Island near Ocasio-Cortez’s own congressional district.

“These allegations are absurd. Amazon associates receive industry-leading pay starting at $15 an hour – in fact, hourly associates at our Staten Island facility earn between $17.30 and $23 an hour, plus benefits which include comprehensive medical, dental, and vision insurance. On top of these benefits, Amazon pre-pays 95% of continuing education tuition costs through its Career Choice program for associates who want to pursue in-demand careers. For anyone who wants to know what it’s like to work in an Amazon fulfillment center, sign up for a tour today.”

That’s the thing with Democratic Socialists. Whatever demands anyone meets are yesterday’s demands. If they say they want $15 per hour and that gets delivered, they will not celebrate it as a victory for long. They’ll quickly turn around and demand $20 per hour. Why? Because more is never enough.

More is the starting point for Democratic Socialists. It’s also the middle; those who deliver on the demands of socialists will invariably be told the new demands are more. And more. And more.

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Democrats

Justin Haskins: ‘Socialism is completely antithetical to human nature’

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Justin Haskins Socialism is completely antithetical to human nature

Bernie Sanders has a vision for America. A path, as he likes to call it. This path is one that takes us down a winding road of “Democratic Socialism” all the while knowing the end result can be no different from every other path to socialism that has ever been tried. Socialism doesn’t work regardless of what path or which direction you take to get there.

But that’s not stopping proponents of Democratic Socialism, which seems to include the majority of the Democrats running for president today. Led by Sanders and his ideological cohort in the Senate, Elizabeth Warren, the notion that if you take from the rich by force and give it to the poor to “earn” their vote has become the calling card of the Democratic Party. It may have always been heading in this direction, but the 2020 election is shaping up to be either a full embrace of socialism within the party or the (hopefully) final mandate handed down from the people that America refuses to adopt the destructive tenets of a demonstrably poor ideology.

Anyone who thinks socialism will not come full circle if allowed to spring forth in part clearly doesn’t understand the nature of socialism itself. Once the seeds are planted by politicians, fed and watered by voters, and cultivated into laws, it begins the inevitable and unstoppable trend of self-sustained growth. A little socialism is like a plague that spreads until it is all-consuming.

The Heartland Institute‘s Justin Haskins joined Fox News host Tucker Carlson to lambaste the Senator’s repetitive talking points. He and others in his party want to win over the people by offering free stuff. Will voters fall for it?

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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