 Happy Thursday and welcome back to On The Money, where we're excited to guide you through a new Congress. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N. Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis. THE BIG DEAL--Stocks plunge after Apple slashes earnings forecast: Stocks tanked Thursday after Apple slashed its earnings forecast, citing an unexpected drop in global orders caused by trade tensions. The Dow Jones Industrial Average lost 660 points Thursday, while the Nasdaq composite and S&P 500 index dropped 3 percent and 2.5 percent, respectively. A sharp plunge in technology and industrial stocks drove broad losses across the market. Apple's woes: Apple stock fell nearly 10 percent Thursday, a day after CEO Tim Cook announced the company is now projecting first-quarter revenue of $84 billion after initially predicting between $89 billion and $93 billion. Cook blamed Apple's shortfall on the mounting costs of President Trump's tariffs on steel, aluminum and Chinese imports, along with trouble in emerging market economies. His warning was the latest red flag to indicate a potential global economic slowdown. I've got more on the downturn here. Reactions: - "It's not going to be just Apple. There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China." -- Kevin Hassett, chairman of the White House Council of Economic Advisers.
- "At some point this had to be done!" -- President Trump about his tough trade actions on China.
LEADING THE DAY GOP senator calls on Congress to end shutdown without border deal: Sen. Cory Gardner (R-Colo.), who faces a potentially tough reelection in 2020, says Congress should fund the federal government, even without a deal to finance President Trump's border wall. Gardner is the first Senate Republican to call for ending the partial shutdown without granting Trump's demand for $5 billion to fund a border wall. "I think we should pass a continuing resolution to get the government back open. The Senate has done it last Congress, we should do it again today," he said. Gardner says then Democrats will face pressure to explain why they don't support more money for border security after they voted to spend an additional $46 billion on the border in 2013. The Hill's Alexander Bolton tells us more here.
The background:
- All but five Democrats on the Senate Appropriations Committee last year supported a homeland security funding bill that allocated $1.6 billion for border fencing. Democratic leaders have scaled back that offer to $1.3 billion -- the same amount Congress appropriated for fiscal 2018 for border fencing.
- "We can pass legislation that has the appropriations number in it while we continue to get more but we should continue to do our jobs and get the government open," Gardner said, then "let Democrats explain why they no longer support border security."
- But Senate Majority Leader Mitch McConnell (R-Ky.) says he will not schedule a vote on a clean stopgap funding measure to re-open federal agencies without prior sign-off from the president.
- Trump made a surprise appearance at the White House briefing room on Thursday after Democrats elected Nancy Pelosi to her second Speakership.
- "You can call it a barrier, you can call it whatever you want, but essentially we need protection in our country. We're going to make it good. The people of our country want it," he said about his demand for a border wall.
The road ahead: - Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) warned reporters on Thursday that the partial government shutdown could last for the "long haul," and separately told reporters that the shutdown could last for "months and months."
- Congressional leadership met with Trump on Wednesday at the White House for a briefing on the border but made no progress toward an agreement. They are expected to meet again on Friday.
- House Democrats later tonight are expected to vote on a package to reopen the government. One measure would fund the Department of Homeland Security through Feb. 8, while another would fund other agencies through the end of fiscal 2019. But McConnell has said that plan is a "total non-starter."
Trump's growing anger with Fed chief poses market risks: President Trump would likely find himself in murky legal waters if he attempts to dismiss Federal Reserve Chairman Jerome Powell, but experts say the bigger concern is that any move on that front would ignite a chain of calamities that could derail the global economy and financial markets. Trump has frequently criticized Powell and the Fed for raising interest rates, and the president has reportedly polled advisers on whether to fire his hand-picked chairman. While it's uncertain whether Trump could remove Powell, making a drastic move against the central bank's chief policymaker could unleash economic chaos at a time when the president prepares to seek reelection. "If he were to actually be stupid enough to do it, it would trigger a massive reaction from financial markets that would be catastrophic to his entire presidency," said Daniel Alpert, managing partner at investment firm Westwood Capital. "There will be all sorts of hell to pay." I explain why here. The details: - An attempt to fire Powell would be an unprecedented test of the Fed's independence and the laws meant to protect the central bank from politics in Washington. The move could also trigger a staggering stock market meltdown, spark intense congressional backlash and damage the country's role as the world's largest economy.
- The Fed is considered critical to the stability of the U.S. economy, and its policies have profound influence over foreign counterparts. Analysts say if Trump threatens the Fed's independence, it could throw the global financial system into chaos.
- Without clear guidance from the Fed, global markets could be roiled by uncertainty and fears of growing instability triggered by internal turmoil at the central bank. Trump's influence would also raise questions about the Fed's loyalty to its dual mandate of stable prices and maximum employment.
GOOD TO KNOW - Senate Finance Committee ranking member Ron Wyden (D-Ore.) on Thursday reintroduced a bill that would require President Trump to publicly release his tax returns.
- The government shutdown will cut U.S. economic output by about 0.1 percent every two weeks, according to the White House Council of Economic Advisers.
- President Trump on Thursday called Democrats' opposition to his proposed border wall "strictly political" and accused the party of seeking an advantage in the 2020 presidential election as a partial government shutdown entered its 13th day.
- A top U.S. bank regulator told Reuters on Thursday she had no concerns that stock market volatility will threaten the U.S. banking system, which she said has adequate capital to weather Wall Street's woes.
ODDS AND ENDS - Businesses are seeking to ease the pain of the federal shutdown for the 800,000 federal workers working without pay with freebies and special programs across the country.
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