Will it ever end?

MARKETS

• U.S. markets: Wall Street tacked on a fifth day of gains to the longest winning streak it's seen since September.
• In Fed news: Who put Jack Johnson on Jerome Powell's Spotify? He said the Fed will be "watching and waiting and seeing" before adjusting interest rates. Plus, the balance sheet "will be substantially smaller than it is now."

RETAIL

Do You See This Glass? It’s Half Empty

We know, we know. Yesterday our optimistic newsletter was charged with more dopamine than Ned Flanders after setting a new PR on bench press. Today, though, is a different story.

Major retailers are reeling after early results showed there wasn't much to be merry, jolly, or holly about this holiday season.

Let's survey the damage

• Macy's slashed expectations as holiday sales fell short at several units. It now expects no net sales growth for fiscal 2018, sinking its stock nearly 18% for its worst day...ever.
• Kohl's (-4.68%) also said seasonal sales disappointed, climbing just 1.2% annually (compared to a nearly 7% increase last year).
• Target (-2.87%) was guilty by association. It posted 5.7% holiday sales growth, but that wasn't enough to swim against the current.

Making matters worse? Most experts predicted this holiday season would be the best for retailers in several years. Those sky-high expectations, paired with concerns over rising interest rates and the dent on consumer spending caused by the U.S.-China trade war, has retailers sweating.

But isn't the economy strong?

Yes, and that's good for retailers—but not for all retailers. The divide between old-school big boxes and savvier e-commerce players is getting wider.

Take these stats as evidence:

• Mastercard found overall holiday sales increased 5.1% in 2018 for the biggest holiday spend in six years...and Adobe found online spending during the holidays jumped 17.8%.
• But ShopperTrak observed holiday traffic to physical stores fell 3%.

So when will things get better?

Hard to say. Company-issued reports offer an appetizer for holiday retail performance, but it's tough to review the entire meal without more data.

There's just one problem: That data could be kept under wraps for weeks to come. If the partial government shutdown continues, the Commerce Department won't be able to release its December retail sales data (slated for this Wednesday).

AUTO

Ford Cuts Its Eurotrip Short

And not because it got scarred at a nude beach.

Ford (-0.57%) is axing thousands of jobs across Europe in a cost-cutting effort aimed at offsetting falling profits on the continent.

It's also shutting down a factory in France, considering scrapping low-profit models, reviewing a Russian joint venture, and planning to consolidate its HQ in Britain.

Why all the self-reflection? Tougher emissions rules and shrinking demand have weighed heavily on Ford in Europe, where it claims 6.4% of the new car market. From January to November, Ford sold 2.3% fewer cars in the European Union YoY.

But auto problems span the globe:

• In the U.S., car sales have slowed as the promise of low-interest loans fades.
• In China, car sales tanked 19% in December for the steepest decline on record.
• In Europe, the Brexit deadline (and the higher auto tariffs it might bring) is coming up fast.

Which means Ford isn't alone in its troubles. Also yesterday, Britain's Jaguar Land Rover announced plans to cut its global workforce by 4,500 due to "multiple geopolitical and regulatory disruptions."

SHUTDOWN

Shutdown Chronicles: Day 21

Dear Diary,

We've hit the three-week mark—this partial government shutdown is swiftly approaching the length of my last relationship. And with neither Republicans nor Democrats budging, I can't help but wonder: will it ever end?

Jerome Powell offers a warning...

The Fed chair acknowledged that a long shutdown could prove harmful to the U.S. economy. "If we had an extended shutdown then I do think that would show up in the data pretty clearly," he said during an event yesterday.

President Trump isn't going to Davos...

There will be one extra ticket up for grabs at the famed Davos World Economic Forum now that President Trump announced he's canceling his trip. FYI, Davos, which begins Jan. 22, doesn't usually count the U.S. president among its attendees—last year, Trump became the first president to attend since Bill Clinton in 2000.

A tough day for federal workers...

Today, many of the 800,000 federal workers affected by the government shutdown will miss their first paycheck. More than 4,700 federal employees filed for unemployment during the last week of December, compared to the 929 who filed the week before.

And it's approaching a record...

If it doesn't end today, this government shutdown will become the longest on record, edging out a 1995 shutdown that lasted 21 days.

INTERNATIONAL

That Inaugural Ball Ended Early...

Let's put it this way: Venezuelan President Nicolas Maduro probably didn't get a standing ovation yesterday following his inauguration to a second term—one already marked by severe political, economic, and humanitarian issues (many of which arose on his watch).

Here's a small sampling of what he's dealing with:

• An annual inflation rate of 1,400,000%. Think that's bad? It's forecast to hit 10,000,000% by year-end.
• Venezuela owes international creditors about $150 billion.
• Venezuelans lost an average of 24 lbs in 2017 (with the government restricted from importing food or medicine) and suffer from a 90% poverty rate.

QUIZ

Morning Brew’s Weekly News Quiz

Less recognizable than the new Mastercard logo. Better rested than a CES attendee. More ready to mingle than Jeff Bezos. It's the Brew's weekly news quiz.

1. Ray Dalio's flagship hedge fund returned 14.6% last year, outpacing the industry average by a country mile. Can you name a) his firm and b) the fund's name?

2. What company am I? I'm being pressured by an activist investor to raise prices on some items. I bought Family Dollar for $9 billion in 2015. My main rival and I operate more stores than the top six U.S. retailers combined.

3. This NYC landmark is for sale. Can you name it?

4. After a $2 billion investment from SoftBank, WeWork CEO Adam Neumann said his company is rebranding as "The We Company." Which of the following is not one of its business divisions?

a) WeWork: Main office rental business

b) WeGrow: Elementary school and coding academy

c) WeBury: Funeral planning and cremation services

d) WeLive: Nascent residential unit

5. Toy maker Mattel is producing a live-action Barbie movie starring and co-produced by Margot Robbie. What year was Barbie first introduced to the public?

Answers:1) Bridgewater Associates and the Pure Alpha fund 2) Dollar Tree 3) the Chrysler Building 4) WeBury is not real 5) 1959

WHAT ELSE IS BREWING

• BlackRock (-0.17%), the world's largest asset manager, is cutting about 3% of its workforce in the next few weeks.
• American Airlines (-4.16%) lowered its profit estimates for 2018, and—you know the drill—other airline stocks fell like dominoes.
• The U.S. Air Force has accepted the first delivery of a flawed Boeing aerial refueling tanker, part of a $44 billion program that's been delayed and still needs
• IMDb, the film/TV site owned by Amazon, is launching a streaming video channel. But here's the kicker—it's free. No subscription fee, all ad-based revenue.

BREAKROOM

Black Friday

Retail had a tough week. Macy's and Kohl's got smacked on disappointing holiday sales numbers yesterday, and Sears is hanging on for dear life. But that doesn't mean they can't be the protagonists of our trivia section.

So here's the deal: We're going to give you a product. You'll guess whether you can find the item in Sears, Kohl's, both, or neither (*note: must be located in-store).

1. Samsonite luggage
2. 12-pk. Bridgestone golf balls
3. Craftsman riding mower
4. Casper mattress
5. LC Lauren Conrad blush jewelry case
6. Sabra hummus

Breakroom Answers

Black Friday Trivia
1. Both 2. Both 3. Only Sears 4. Neither 5. Only Kohl’s 6. Neither