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Economy

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

Progressive think tanks: If the economy holds strong, Trump should win in a landslide

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Progressive think tanks If the economy holds strong Trump should win in a landslide

Tribalism makes it challenging to gauge where the sentiment of the most important voting blocks stand. Hyper-leftists would vote for a broken refrigerator before voting for President Trump in 2020, while the MAGA crowd would stand in line with no food, water, or a bathroom for two days if that’s what would be required for them to vote for their man.

But these won’t be the people who determine the results of the 2020 election. They never are, even if their numbers are greater on both sides as noted by Ben Shapiro in his new book. The rabid Republicans and determined Democrats may ebb and flow in size, but it’s the people in the mushy middle who win elections.

Knowing this, it’s often difficult to determine what the sentiment is if we go solely based on the news. Just as with the dedicated tribes, so too are media outlets generally spun in how they present the news. This is why a story from today on left-leaning Politico prompted a read. It was worthwhile going through the leftist spin to reach the meat of the story, which basically says if conventional wisdom about incumbents and the economy hold up and the economy can remain strong through the election, President Trump should win in a landslide regardless of who the Democrats nominate.

Models from multiple think tanks conclude the conventional model favors the President, but these are unconventional times. It’s still very possible for the economy to remain strong and for the President to be hit with another onslaught of scandals, as he was in 2016. Then, there’s the “it” factor of the Democratic nominee. Someone like Senator Kamala Harris throws in the minority-female combination as an appealing wildcard in the mix. Meanwhile, Beto O’Rourke and Senator Bernie Sanders still have incredible fundraising infrastructures that could help them dominate the money battle through the primaries and during the general election.

Of course, there’s always the possibility the economy could fall. Analysts have been predicting it in a way that’s vulgar, as if they hope the economy falls and people are hurt by it just to make sure President Trump loses in 2020.

If Republicans can put on a full-court press on the economy, something they failed miserably at in the 2018 midterms, they may be able to ride the President’s wave to victories on Capitol Hill as well. November 2020 will sneak up very quickly.

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Democrats

TIL the famous bar AOC worked at shut down over rising costs, minimum wage increase

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TIL the famous bar AOC worked at shut down over rising costs minimum wage increase

Today I learned something that surprised me, not because of the event itself but because so few people have talked about it. Representative Alexandria Ocasio-Cortez (D-NY) is known for being a leader of the socialist movement in Washington DC after rising from the humble status of bartender to the Congresswoman of the 14th district in New York. Her policies include a push for a “living wage” of $15 per hour. I’ve always thought the wording was odd considering Senator Bernie Sanders (I-VT) and others have been calling for a rise in “minimum wage.” Today, I found out why she’s shying away from that phrase.

When New York City raised their minimum wage $15, many businesses were hit hard, especially in the hospitality industry. Restaurants and bars started cutting hours and often even closing their doors over the increase. One of those hit hard by the massive bump was The Coffee Shop. Owner Charles Milite blamed the closure on high costs, with the rise in minimum wage as the last straw.

“The rents are very high and now the minimum wage is going up and we have a huge number of employees,” he said.

The Coffee Shop is the bar where AOC once worked.

Keep in mind, this wasn’t some random bar. The Coffee Shop in Union Square was considered a high-end establishment, buzzing all the time with “A-list” patrons. It was featured many times in the HBO show Sex and the City and had built a reputation as an “it” spot for Manhattan residents and tourists alike. In other words, this wasn’t a hole in the wall hanging on by a string. It was a vibrant, successful business for almost three decades before New York City’s untenable leftist policies, including a $15 minimum wage, became more than the bar could bear.

On the surface, many voters may see the very basic math of “oh, Democrats want to pay me more” and assume there’s no repercussions for such actions. This is why Democrats prey on those people who currently make lower wages. They feel if they can promise them something that sounds good even if they know with 100% certainty based on empirical evidence that it will actually hurt them, these new socialists are willing to make that trade. They figure they can blame the conservatives later for why the place they were working at before cut their hours, removed their jobs, or shut down because of raising the minimum wage.

As usual, socialists rely on ignorance and emotion as the driving forces behind their plans. They’re not stupid. They know their ideas won’t work. But they’re willing to push them on people anyway in hopes that ignorance will keep them in power.

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Economy

Thomas Sowell makes a clear point about Medicare-for-All

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Thomas Sowell makes a clear point about Medicare-for-All

How was the left able to take heat away from their Medicare-for-All proposal, and more specifically the estimated $32 trillion price tag over a decade? They tripled down with the Green New Deal, which some estimate would cost upwards near $100 trillion.

So, the price tag of the Democrats’ desired replacement for utterly failing Obamacare is to take current government control over healthcare and put it on a regiment of steroids and methamphetamine. When you’re going through Hell, keep going, I suppose.

But all of this could be alleviated if voters and politicians took a moment to think about the prospects of Medicare-for-All logically. Let’s erase, for a moment, the Utopian notion that taxing rich people extreme amounts will give us enough money to make healthcare free for everyone while also improving the quality. That’s the goal, right? Cheaper, better healthcare is what most people want. Conservatives believe it’s best to pull government administration out of the equation and put it all on a competitive capitalist model that has worked for nearly every other industry for over a century. Hyper-leftists want to add more government control.

Conservative commentator Thomas Sowell has some thoughts on the matter. One in particular can be wrapped up into an eloquent quote that should be ideological checkmate allowing us to win the healthcare debate.

“It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”

Of course, our version of checkmate requires common sense, logic, and basic math skills. These attributes aren’t as readily present on the left, therefore they might hear this logic and still think single-payer makes sense.

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