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Stocks bounce back from wobbly 2019 start

CNN's Alison Kosik explains why volatility still reigns on the first day of trading in the new year.

Posted: Jan 3, 2019 11:09 AM
Updated: Jan 3, 2019 11:29 AM

President Donald Trump on Wednesday downplayed last month's stock market rout -- a dive that led to the worst December since the Great Depression -- as a "little glitch."

But the President, who took credit for the stock market's upward swing and closely watches the market as a measure of his performance, has privately fretted about the downturn, which he fears could undercut his 2020 re-election bid.

"We had a little glitch in the stock market last month," Trump said during a Cabinet meeting on Wednesday.

He added that the market is still higher than when he came into office.

"It's still up, I guess about 30%, from the time I got elected," Trump said. The Dow closed at 18,332 on November 8, 2016, and was up about 27% to 23,348 on Wednesday.

The jittery stock market in 2018 suffered its worst losses since 2008, leaving the President fuming about the Federal Reserve's interest rate hikes and repeatedly attacking the chairman he picked, former investment banker Jerome Powell.

The President and his economic advisers' frustration with the Federal Reserve is running "extremely high," said one source close to the White House.

"Everyone is nervous about the stock market," the source added of the mood among the President's economic advisers.

Trump and his top aides are pining for a win to settle markets. With the Fed out of his control, Trump has set his sights on overcoming the impasse on trade with China.

"The trade deals we're making for our country are fantastic," he said on Wednesday.

The US economy remains strong, with unemployment near record lows and job growth steady, but economists expect a slowdown in 2019 that could escalate into a full-blown recession heading into 2020.

An announcement late Wednesday from Apple that the tech giant missed quarterly revenue targets by several billion dollars due to "lower than anticipated" iPhone sales in China was the latest signal of a global slowdown, with Apple CEO Tim Cook describing the situation in China as an "economic deceleration."

That could increase the pressure on Trump and his negotiators to close a deal with Beijig and end the trade war he set off last year by imposing tariffs on billions of dollars in Chinese imports.

Trump and Chinese President Xi Jinping agreed last month to a 90-day truce in the trade war. While the Chinese have indicated a willingness to increase their purchases of US goods, some Trump administration officials remain skeptical that China will be willing to make the structural reforms necessary to tackle the core issue of the trade imbalance between the two countries.

But some White House advisers now worry that the US stock market downturn -- and Trump's anxiety over its impact on his re-election chances -- could embolden the Chinese and make them less willing to make concessions.

The Dow has grown increasingly volatile in the past year, swinging more than 1,000 points on five days in 2018 -- something that's happened only eight times in the history of the exchange.

The Dow closed down 8.7% for all of December, the worst record for the month since 1931, when Herbert Hoover was president. In one seven-day stretch, it fell by 350 points or more six times.

That included the record-setting Christmas Eve slide, when markets fell in part because of Treasury Secretary Steven Mnuchin's surprise announcement that he was interrupting his vacation in Mexico and calling major bank CEOs to gauge liquidity amid the partial government shutdown -- a risk the markets hadn't been concerned about.

Stocks remain far more volatile than indicators like business investment and unemployment, for example, driven by the vagaries of earnings seasons and currency fluctuations. However, Americans tend to see the major indices as a leading indicator of how businesses are doing, and adjust their views of their own personal finances accordingly.

A 1999 study by an economist at the Federal Reserve Board found that this isn't because the stock market actually influences most consumers' net worth, but rather because they used it as a yardstick of how much they're likely to earn in the near future.

Only about 17% of Americans own stocks directly, while about half are invested through their retirement accounts, according to the Pew Charitable Trusts.

There are signs that the volatility is creating hesitance. Last week, the Conference Board's consumer confidence index posted its largest drop since July 2015.

A measure of business uncertainty developed by the Federal Reserve Board of Atlanta has been rising all year, likely driven by tariffs, slowing growth, and political conflict. In December, business' expectations of their own future growth dropped sharply.

When the stock market was soaring during the first year of his presidency, Trump frequently touted the numbers as a marker of a strong economy and the success of his policies.

Trump has lately turned to other measures, including low gas prices.

While he acknowledged the market downturn Wednesday, Trump touted the "strong economy" in the US and pointed to the prospect of more trade deals on the horizon, including with China, and appeared to promise a stock market recovery.

"It's got a long way to go, tremendous amount to go," the President said.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 153270

Reported Deaths: 3807
CountyCasesDeaths
DeSoto10249104
Hinds10095199
Harrison7173111
Jackson6440124
Rankin5705103
Lee517095
Madison4902107
Forrest385986
Jones361788
Lauderdale3567147
Lafayette329752
Washington3197108
Lamar294750
Oktibbeha248462
Bolivar242484
Lowndes240464
Panola224852
Neshoba2225118
Marshall219450
Leflore206891
Pontotoc202429
Monroe201078
Lincoln192865
Sunflower191955
Warren177757
Tate175351
Union169526
Copiah165440
Pike163958
Yazoo157940
Scott156630
Itawamba155635
Pearl River153468
Alcorn152828
Coahoma151043
Simpson150353
Prentiss148431
Adams143151
Grenada141445
Leake138344
Holmes131561
Tippah126730
George126225
Covington124639
Winston123726
Hancock122840
Wayne119023
Marion117346
Attala116134
Tishomingo110042
Chickasaw108332
Newton107529
Tallahatchie97427
Clarke92453
Clay92327
Jasper83522
Stone78515
Calhoun77713
Walthall76929
Montgomery75425
Carroll73815
Lawrence72614
Smith72116
Yalobusha72028
Noxubee71917
Perry67726
Tunica61819
Greene60822
Claiborne58816
Jefferson Davis57817
Amite55214
Humphreys54319
Benton49618
Quitman4947
Webster45014
Kemper44218
Wilkinson40122
Jefferson35711
Franklin3485
Choctaw3457
Sharkey31717
Issaquena1174
Unassigned00

Alabama Coronavirus Cases

Cases: 247229

Reported Deaths: 3577
CountyCasesDeaths
Jefferson32718500
Mobile19904362
Madison13425148
Tuscaloosa13167154
Montgomery12380236
Shelby1046577
Baldwin882098
Lee778566
Morgan675150
Calhoun6366121
Etowah635166
Marshall630955
Houston532338
DeKalb489736
Cullman447442
Limestone430245
St. Clair425755
Lauderdale413354
Elmore409464
Walker3689111
Talladega353554
Jackson327123
Colbert314642
Blount294640
Autauga275142
Franklin254233
Coffee246515
Dale234454
Dallas226532
Chilton225038
Russell22313
Covington220334
Escambia198631
Chambers177250
Tallapoosa177091
Pike159214
Clarke158919
Marion141336
Winston134423
Lawrence129636
Pickens124218
Geneva12378
Marengo122524
Bibb118817
Barbour117511
Butler117342
Randolph103821
Cherokee102924
Hale97731
Fayette92216
Clay92024
Washington91619
Henry8676
Lowndes79929
Monroe79011
Cleburne77414
Macon74522
Crenshaw71230
Bullock70019
Perry6896
Conecuh68514
Lamar6838
Wilcox63918
Sumter58422
Greene42718
Choctaw42613
Coosa3464
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