On The Money: Stocks plunge after Apple slashes earnings forecast | GOP senator calls on Congress to end shutdown without border deal | Trump's Fed attacks pose market risks

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.

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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.

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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 TrumpDonald John TrumpPentagon update to missile defense doctrine will explore space-base technologies, lasers to counter threats Giuliani: 'I never said there was no collusion' between the Trump campaign and Russia Former congressmen, RNC members appointed to Trump administration roles MORE'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 GardnerCory Scott GardnerOn The Money: Shutdown Day 26 | Pelosi calls on Trump to delay State of the Union | Cites 'security concerns' | DHS chief says they can handle security | Waters lays out agenda | Senate rejects effort to block Trump on Russia sanctions Senate rejects effort to block Trump on Russia sanctions Overnight Defense: Trump faces blowback over report he discussed leaving NATO | Pentagon extends mission on border | Senate advances measure bucking Trump on Russia sanctions MORE (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:

 

The road ahead:

 

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.

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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

 

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.