Close Update: Santa Claus Rout Accelerates After Mnuchin Meeting Spooks Nervous Investors



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Wall Street’s major averages were hemorrhaging for a fourth straight day when Treasury Secretary Steven Mnuchin’s meeting with bank CEOs for assurances of adequate liquidity coupled with the continued government shutdown spooked Wall Street and sent the Dow Jones Industrial Average below 22,000 for the first time since Sept 2017. With all eleven sectors in the red, the S&P 500 was at its lowest level in 19 months.

Mnuchin convened the “Plunge Protection Team” — first formed after the 1987 stock market crash — to mitigate further damage to investor confidence, but instead alerted nervous investors to the risks of another significant market correction and economic recession.

Amplified by thin holiday-related liquidity and last week’s crushing 1,600+ point drop in the Dow, the major indices all opened sharply lower. A mid-morning attempt to bounce back was extinguished by market anxiety originating from President Donald Trump’s continued criticism of the Fed, deepening sell-off in oil and pre-holiday risk-positioning. The flight-to-safety drove the 10-year yield down to 2.76% and the price of gold to a six-month high.

Data released this morning failed to put a dent in the negative price action. The Chicago Fed national activity index dropped to 0.22 in November from 0.24 the month prior, but was better than the estimated 0.19.

Most European bourses were closed for the Christmas Eve holiday, but those that were open for a shortened session closed lower in sympathy with the US. The stronger British pound weighed on the UK’s FTSE-100 while gilts richened as much as 6 basis points.

Crude oil was down $1.26 to $44.33 per barrel. Natural gas was down $0.28 to $3.54 per 1 million BTU. Gold was up $14.00 to $1,272.10 an ounce, while silver was up $0.12 to $14.83 an ounce. Copper was down $0.01 to $2.66 per pound.

Among energy ETFs, the United States Oil Fund was down 2.93% to $9.29 with the United States Natural Gas Fund down 3.07% to $29.32. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 2.14% to 20.84 while SPDR Gold Shares were up 1.07% to $119.98. The iShares Silver Trust was up 0.91% to $13.86.

Here’s where the markets stand at mid-day:

US MARKETS

NYSE Composite Index was down 248.76 points (-2.26%) to 10,787.34

Dow Jones Industrial Index was down 653.17 points (-2.91%) to 21,792.20

S&P 500 was down 65.52 points (-2.71%) to 2,351.10

Nasdaq Composite Index was down 140.08 points (-2.21%) to 6,192.53

GLOBAL SENTIMENT

FTSE 100 was down 35.18 points (-0.52%) to 6,685.99

DAX was closed

CAC 40 was down 67.99 points (-1.45%) to 4,626.39

Nikkei 225 was closed

Hang Seng Index was down 102.04 points (-0.40%) to 25,651.38

Shanghai China Composite Index was up 10.76 points (+0.43%) to 2,527.01

NYSE SECTOR INDICES

NYSE Energy Sector Index was down 247.30 points (-2.71%) to 8,889.76

NYSE Financial Sector Index was down 74.32 points (-1.14%) to 6,670.33

NYSE Healthcare Sector Index was down 243.98 points (-1.67%) to 14,351.26

UPSIDE MOVERS

(+) MB (+64.96%) Agreed to be acquired by Vista Equity for $36.50 per share

(+) MICT (+25.58%) Awarded $1.4 million contract for TREQ-317 computer

(+) ACOR (+6.41%) Gets FDA approval for Inbrija for Parkinson’s disease

DOWNSIDE MOVERS

(-) HSGX (-72.15%) Scraps NeoCart after FDA seeks another trial for approval consideration

(-) DVMT (-24.66%) Expects FY18 revenue to be below Wall Street’s expectations

(-) RPM (-4.52%) Downgraded at JP Morgan to underweight from neutral, PT lowered to $55 from $60


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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