Not very merry: US stocks plunge before Christmas
- Author: Eleanor Harrison Dec 26, 2018,
Dec 26, 2018, 8:00
Monday's tweet comes after United States equity markets opened sharply lower in a holiday-shortened session.
The developments came a day after Mnuchin tried to reassure financial markets after the Dow Jones Industrial Average dropped by 653 points, following the Dow's worst week since the 2008 financial crisis.
Japanese stocks and other Asian markets that opened for trading on Christmas Day followed suit.
The MSCI Asia Pacific Index was up 0.5 percent as of 9:10 a.m.in Hong Kong.The Topix Index rose 1.7 percent.Futures on the S&P 500 Index advanced 0.3 percent. Traders have also fretted over the U.S.
President Donald Trump blasted the Federal Reserve on Monday, describing it as the "only problem" for the United States economy, as top officials convened to discuss the growing rout in stock markets caused in part by the president's attacks on the central bank.
The declines brought the S&P 500 to the brink of a "bear market", considered a drop of 20 percent from its peak.
The president tweeted that Fed officials "don't have a feel for the Market, they don't understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders". "The Fed is like a powerful golfer who can't score because he has no touch - he can't putt!", Trump wrote on his Twitter page.
Whether or not Powell can actually be fired by Trump remains in question - as of Monday (December 24) morning, the president was reportedly reaching out to advisors to determine if he is legally able to do so.
A statement by Mnuchin on Sunday about his conversation with the banks and plans to convene the so-called Plunge Protection team "was not especially comforting, however, given that investors had not generally been questioning market functioning in recent days, despite large declines", Nick Bennenbroek, currency strategist at Wells Fargo in NY, wrote in a note to clients. He also attempted to convey that Trump knows he does not have the authority to fire Federal Reserve Chairman Jerome Powell, whom the president has ripped while the central bank raises rates and equities markets sputter. In the wake of this dilemma, the U.S. president informally talked about the possibility of firing the Fed Chair Jerome Powel, which might appear to be as an attack over the independence of central bank, at least two sources familiar with the issue confirmed on Sunday, December 23rd.
"It will only shatter the market confidence further", said Naeem Aslam, chief market analyst at Think Markets UK Ltd.
One reason stocks have been declining is because of the partial US government shutdown over Trump's demand for billions of dollars for a wall on the Mexican border, his top campaign promise.
Mick Mulvaney, his new acting White House chief of staff, painted a similar picture during an appearance on Fox News on Sunday. But I think it will straighten. "There's a chance this could go into the next Congress". "Not only did he consult with the biggest banks, but he is talking to all of the financial regulators on Christmas Eve". This is the 63rd straight year that NORAD has publicly tracked Santa's sleigh on its global rounds.