It’s starting to look like investors have been put on the naughty list this year. Just look at this long list of woes.
There’s the threat of a U.S. government shutdown over the holiday period which took a step closer to reality late
Thursday as a bill backed by President-elect Donald Trump to keep the government open failed a fast-track vote in the House.
The stock market has also had a rough week, it could do without political uncertainty
right now. Federal Reserve Chair Jerome Powell’s Christmas message soured the holiday spirit with the prospect of fewer rate cuts next year amid stubborn inflation.
Then Trump issued a fresh tariff threat
Thursday—this time targeting Europe, which won’t help on the inflation front given the pressure levies can put on prices.
The market’s recovery failed to get going Thursday and now investors are grappling with a potential shutdown.
But a shutdown, if it happens, doesn’t necessarily point to pressure on the stock market. During the last shutdown under Trump–the longest in U.S. history between Dec.21, 2018 and Jan. 25, 2019–the S&P 500 jumped 10.3%, according to Dow Jones Market Data. In fact, the index has climbed throughout the last four shutdowns going back to 1995 under President Bill Clinton.
However, the S&P 500 fell during five of the six shutdown periods in the 1970s. Overall the average gain is just 0.1%.
The wider economic impact is also likely to be contained. Goldman Sachs analysts estimated that a shutdown would reduce GDP growth by 0.15 percentage points for every week it lasts. But they said growth would be
boosted by the same amount the next quarter once the government is reopened.
The millions of Americans traveling over the holidays could bear the brunt of it all, though. The Transportation and Security
Administration said an extended shutdown could cause longer wait times at airports.
With the Santa rally scrapped this year, that’s unfortunately one holiday tradition Americans can always bank on.
—Callum Keown
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House Lawmakers Vote Down Trump-Backed Plan to Avert Shutdown
House Speaker Mike Johnson tried to push through a plan to avert a government shutdown, even getting a key endorsement from President-elect Donald Trump, but that effort failed a vote in the chamber that didn’t even get a majority support of Republicans. It’s back to the drawing board.
- Johnson brought the bill to a vote Thursday evening under a fast-track process that required two-thirds support to pass. The vote was 174 in favor and 235 against, with 1 member voting present. Nearly all Democrats joined with 38 Republicans to squash the measure.
- The
bill’s failure raises the pressure on Congress to extend funding past Friday’s deadline, or shut down the federal government starting Saturday. Trump had endorsed the bill, heaping particular praise on a provision that postponed a decision on raising the nation’s debt ceiling.
- The debt ceiling, which is the government’s borrowing limit, was going to emerge as an issue for Congress early in Trump’s second term, potentially interfering with his ability to drive key legislative priorities. But it wasn’t clear how many lawmakers would support including it in a temporary spending bill, even among Republicans.
- Any new plan Johnson arranges overnight faces not only a sharply divided House vote but a skeptical Senate, the Democratic-controlled chamber where lawmakers expressed anger that the original bipartisan plan fell apart after Trump and close advisor Elon Musk trash talked it on Wednesday.
What’s Next: Some lawmakers talked about the possibility of an even shorter funding extension, of mere weeks rather than the three-months Johnson proposed in his bill. GOP Sen. Susan Collins told reporters Thursday that she could support a three-week extension as long as it prevents a shutdown.
—Liz Moyer and Anita Hamilton
Musk’s Wealth Surges Toward Half a Trillion Dollars Following Election
The wealth of Tesla and SpaceX CEO Elon Musk—the world’s richest person—is heading toward an unprecedented milestone, half a trillion dollars.
- Since Donald Trump won the presidential election on Nov. 5, Musk’s net worth skyrocketed 84% from $264 billion to $458 billion as of Wednesday, according to the Bloomberg Billionaires Index.
- Tesla’s stock has soared by about 75% since the election, through Wednesday. This has driven Musk’s wealth to unprecedented heights, alongside a secondary offering of SpaceX stock for existing holders that valued the privately held aerospace and
defense company at $350 billion.
- The Bloomberg Billionaires Index calculates net worth by including public and private assets, and cash. Musk’s net worth includes a 13% stake in Tesla; a 42% stake in SpaceX; and about 79% ownership of social media platform X.
- Musk’s closeness to the incoming president has given some investors confidence in the trajectory of his businesses, particularly Tesla. “Musk’s ties to President-elect Trump have intensified an already-bright spotlight on Tesla and have been met with an overwhelmingly positive stock reaction since the election,” Baird analyst Ben Kallo said.
What’s Next: The full effect of Musk’s role in the U.S. government on his businesses, and his wealth, has yet to unfold. On Thursday, Sen. Rand Paul, a Kentucky Republican, floated the idea of Musk becoming speaker of the house—a position that apparently doesn’t require being a member of Congress.
—Abby Schultz
FedEx to Split Off Freight Business as It Lowers 2025 Outlook
Logistics giant FedEx Corp. is splitting in two, unveiling plans to spin off its freight division, which makes up a smaller part of its sales than other divisions. Doing so would create two publicly traded companies and “unlock value” for investors, taking a cue from other companies that have recently taken the same step.
- FedEx said it was considering the move this summer. Sales at the company are dominated by Express, which is its domestic and international shipping services for packages. The Freight business, with $9.4 billion in sales in 2024, provides less-than-truckload (LTL) freight services across multiple distances.
