deserved to rest in peace. that's all for this edition of "dateline." i'm craig melvin. thank you for watching. good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. these are your headlines >> european markets pump the brake s. the fed signals plans to keep ritz rates higher for longer and ruling out the possibility of cuts. asian stocks with a four-month high and hang seng with a rally

the eu backs covid tests for travelers from china and hong kong confirms it will reopen the border with the mainland next week for the first time in three years. amazon will slash more than 18,000 jobs. a sharp increase from initial estimates as tech sector layoffs gather pace. good morning welcome to "street signs." let's check in on markets. still digesting the fmoc minutes from yesterday more hawkish than some hoped for. the fed will do what it will take to keep inflation in check. a lbit of a turn around today, in aeurope, the picture s

mixed. the stoxx 600 is down .20% that hawkishness coming through and individual stories remember in the last couple days in europe, we had positive macro data pmi numbers and final pmi better than expectations. there is a positive momentum on the macro fund the stoxx 600 today is struggling to get a significant rally in as far as european markets, this is the breakdown a mixed picture. dax down .20%. we are seeing a bit of a lift in the industrial space cac 40 in france is down .50%. the ftse 100 in $100 in the u up .30%. over the holiday season and

guiding to a positive 2023 as well that is giving a bit of a lift to other retailers in the space. as far as sectors, this is the breakdown. retail at the top. no surprise there. travel is up .75%. this is interesting to watch as we are seeing many airlines and countries around the world impose restrictions on travelers coming from china. this is an evolving story and one we will talk about more on the show as the eu puts together their response to the chinese passengers coming into the continent. basic resources up .60%. we are seeing a bounce in the mining space at the bottom, media is lagging down 1%. chemicals down .90%. european yields. we have traveled so much in the last couple days of the year to give you context, the 10-year

bund was down. french o.a.t. was down .27%. a remarkable move and that is because of the lower than expected inflation data. we are seeing a move to the flip side yields are moving higher we have 10-your bund at 3.32 significantly lower than this time yesterday morning 10-year france up .28% the difference is still right above that 200 basis point mark. it has started to narrow that is something to watch as well. let's dive into the fed minutes. federal reserve backing fresh rate rises this year many polls show the central bankers caution against the unwarranted loosening and getting back to the 2% target

with no official predicting rate cuts this comes as the fed reserve raises the benchmark ending the 75 point rate hike lifting the target range between 4.25% and 4.5% the risk of tightening too much was seen as a bigger concern according to the minutes, 17 of 19 officials s projected rates t 5.1% in september, not a single fed official forecasted rates above 5%. and neel kashkari still has at least 100 basis point hikes this year once it is reached at 5.4% more hawkish material from the fed. we will hear more from the federal reserve today.

steve liesman will speak with esther george and followed by the atlanta fed president raphael bostic lots of fed chatter. now the fed has done away with forward guidance, there is more emphasis on the data. yesterday, we learned u.s. job openings fell less than expected in november. the number of available positions at 10.46 million from 10.51 million in october the number of quits rose by 126,000. separately, the ism manufacturing index fell for the second straight month from 49 the month prior. 2022 had rate hikes across many markets tim edwards with s&p 500 is with us

tim, i want to kickoff what we saw yesterday. a bit for the bulls and bears in terms of data. the economy is slowing, but the labor market remains tight everybody is trying to figure out what this means for the fed. what do you do with the data as an investor? >> it is interesting to reflect, actually exactly a year ago that we got the december minutes from the fed. they said we will change direction and that turned out to be the high in the equity markets. this year, we got the minutes from the december meeting and what we learned was we are not going to change direction. there is a real contrast look at the fed futures markets. the market expects the feds to keep raising rates for a bit, but start in a loosening cycle by the end of the year what we read yesterday was the view of the fed of whatever it was 16 out of 17 is not going to happen there has to be some resolution there that one of those has to be right i think what we set up there on

the first week of the year is that tension is going to continue to play out strongly for at least the first part of the year. >> it is such a conundrum. the market believes in the fed pivot and the market rallies it is a balancing act for the fed. that is why they have done away with forward guidance in part. how do you think of the conundrum? >> as the consequences of doing away with forward guidance, fine, that is not there. they are acknowledged in the minutes. we are worried about what the market thinks we're going to do. here is not forward guidance by the way, don't expect us to cut rates. i think why does the market think the fed will change its mind they think on balance they believe inflation will slow laster than the fed is expecting to there are promising signs with

housing and energy markets, et ce cetera the fed has most today and recent data than anyone else there is the tension. >> i would ask about stock market performance 2022 was a remarkably p challenging year the nasdaq down over 30% tough year for tech and the growth sector in particular. let me ask you historically, isn't it true that typically any down year tends to be followed by more positive year? >> it is is true. most of the time with a double digit down year. it has been historic in 2001 and 2002 was one occasion another one earlier in the '70s. it is rare most of the time you get cheaper stocks, that is the time to come in

most of the fall in the s&p last year was from multiple things. prices falling and earnings remain relatively strong if earnings remain strong, we will find in hindsight, it is another year where a big decline is a positive. there you go 1973 and 2001. >> with the exception of a couple of years in general, a very deep negative year of losses follows by a positive year that's one take. >> that's good if you want another positive one. if you look at the treasury markets. u.s. treasuries now with two consecutive years of declines. they never had a third there is a first time for everything in terms of prices coming down >> one thing i want to ask is about growth versus the value. growth falling out of favor in 2022 does that continue into 2023 >> it's a hard one to predict.

i'm not going to make a prediction growth was incredibly extended by the end of 2021 various individual companies where you would say guess these valuations were nuts that is less the case now. some of the excesses have been deflated in relative growth to value and they are closest together it is more finally balanced. what i expect to happen is the driver and may well be sectors how does financial do over technology and more growth value cycle? one that informs that is part of the troubles that growth had were due to the monetary conditions if you want to grow your company, borrow lots of money and invest it helps to have cheap money the re-pricing of that ability to borrow money is a major

reason it seems like we now are pricing in 5% rate in middle of the year there are not a lot of people out there. >> i think the comparisons are interesting. what about bonds versus equity we have been in an environment which has driven the investment decision in the last secretary d deck -- decade how do you think about the tradeoff and investment comparison there >> the two have been correlated in 2022. we didn't see that >> that was absolutely the big challenge of last year the collapse in diversification. diversification within energy. the traditional portfolio didn't have the built-in buffers you expect i think when you look at going forward and looking at bond

market and cash market, you are right. for the first time in a long time, there is an alternative. it is quite acceptable 4% in the u.s. 2% on my cash. that may not beat inflation, but it is just a couple of days ago, the last negative yield moved into positive yield. it is not that crazy any more. i think one of the choices that investors can make is there has been volatility in bond markets and treasury markets in particular that is a challenge and one with the positive correlation if you are looking for income, you look at the stable dividend. if you pass through the section and not only financials and insurance companies and generate income of relatively defensive i think that might be an interesting space to consider.

do i need bonds? the majority of what other parts of the equity market can bring >> i don't know from aunt tina. >> on that note, let's continue talking stock market and talk china. do stay with us. we are looking at chinese tech stocks in the u.s. surging. overall surging on 13% over the first two trading days of 2023 start of the best year on record dating back 20 years the nasdaq golden dragon china index saw the worst in 2022. jumped from the october low. there is the golden dragon index. the hong kong list china stocks. you've got major gains for a number of those as well.

ten cent up and met tmetiuan. tim, is this the sector you should put your money? >> we are seeing exuberance returning to the market. it has been beaten up, the chinese tech sector, there is news that is giving people hope. >> tim, are you seeing a desire to get involved at the equity level? a lot of attractive opportunities out there in emerging market bonds because they sold off heavily over 2022. lack of liquidity and monetary policy, et cetera, et cetera do you think they can flow back into the market? >> i think so. to put it in balance, if you put

it at u.s. high yields, that was yielding 8.7%. many investors would be tempted by that. do you need to reach harder to access or volatile markets i take the point to china on the equity and bond market does feel more investable today than four or five months ago >> the price action is confirming tim, thank you for joining us at the desk today happy new year. >> happy new year. >> tim edwards global head of investments from s&p. china services rose at a lower number as coronavirus cases rose business confidence rose to a 17-month high. sam baddas filed this report >> reporter: contrasted for a fourth month the survey putting this down to

business activity and work not as hit as hard inflation pressure eased and business confidence hit a 17-month high. the bad news was employment continues to weigh people left jobs with the pandemic and businesses cut staff to contain costs companies also had to raise their prices it is the first snapshot of the services sector since china dismantled the covid ycurbs. these companies went from dealing with government to self imposed lockdowns as cases soared that's not good for shopping malls and bars and restaurants they held upper with numbers falling sharply. the data is building the case for policy the pboc will keep liquidity ample in 2023 and emphasizing financial support for c

consumption and real estate market that seems to be what the markets are betting on given the bullish start to the year for chinese stocks, investors are looking past the downbeat data and toward the reopening. in singapore, i'm sam baddas back to you. and foxconn sales are down in december 12.3%. the outlook for the first quarter will be in line with market consensus despite 12% fall in sales in december. coming up on the program eu officials recommend that travelers from china require proof of a negative covid test to fly we'll discuss more after the break.

welcome back china confirmed it is set to reopen the border with hong kong for the first time in three years as beijing relaxes covid rules. from january 8th, residents will cross the border on tourism and business visas and not require a

negative test on arrival. the world health organization says data from ch china shows no new covid st traistrang strains. it urged the government to provide more data. eu officials are strongly recommending that travellers from china should have a negative covid test before flying the move comes after several countries imposed resdrtriction on on arrival from china. sylvia joins us at the desk. the key word is recommend. they are not enforcing it and deferring to national governments. the eu is not making a decision. >> it cannot when it comes to health policy, it is up to the member states.

that is why we see the word recommend. ultimately, it is up to the governments to decide. what the eu is recommending is essentially for travelers that will move from china to europe to present a negative test and they will also be likely to be asked to wear a face mask and also be subject to random testing when arriving in a european member state. let's see how this will be implemented. what reaction we will see from the chinese authorities because they are not very supportive and actually critical of the measures in the eu as you mentioned, it is not just the eu you have australia, u.s., india, several countries imposing restrictions on travelers from china let's see h-- china let's see how this will pan out. the eu put out an offer to china to get vaccines that the

europeans have for the time being, china has not said yes to the offer. of course, one of the concerns of the europeans is the fact that some of the fvaccins developed in china are not adapted to the omicron variant >> there is no case at this stage that china would be open to taking in the foreign vaccines i have to ask what is the point of the recommendations from the eu the health community seems to suggest that measures like these don't actually have much of an impact on controlling the spread of the virus. >> that was the recommendation yesterday from the transport agency. >> you look at the industry and the airline industry and this is not good news for them it could deter people from traveling. this is important with the eu and this is needed because we saw italy going ahead with asking the chinese travelers for a negative test.

let's say portugal does not have that recommendation. people from china can travel to portugal without having to show a negative test and make their way to italy without needing a negative test. that is not the requirement. this is technical. you need cooperation among the 27 if you make this work. >> it is also quite a difficult and challenging issue if you are a chinese tourist traveling from portugal to italy to take the covid test of sylvia, thank you for joining us on the set we will hear a lot more about the covid situation in china also coming up on the show, we are going to have the latest pmi data from uk as investors look for insight into the state of the economy

welcome back to "street signs. i'm julianna tatelbaum >> i'm joumanna bercetche. these are your headlines

>> the fed signals plans to keep rates higher for longer and ruling out cuts this year. asian stocks scale a four-month high with hang seng closing up 4% and the u.s. listed shares with the biggest start on record. and hong kong confirms it will reopen the border with the mainland next week for the first time in three years. amazon will slash 18,000 jobs as tech sector layoffs gather pace. we're just about a half hour -- one and a half hours into the trading session today we have a bit of a reversal. softer start than the first three days of the week and year. stoxx 600 is pulling back 20 basis points

this after major rally yesterday which saw the stoxx 600 gain 1.4% a lot of that positive momentum coming from the downside surprise on the inflation front. here is the region perspective ftse 100 is out performing a bit of reversal there from yesterday. we have cac 40 down .50% forex markets. the dollar trading on the back foot against the swiss franc and euro 106.19 joumanna we are getting data from the uk these are the final services pmi numbers. composite and service. the services number at 49.9. a fraction lower than 50 the final composite pmi is in line with the flash coming in at 49 for the month of december that is an interesting one

arizo a few days ago, julianna, we had chris williamson from s&p talking about the fact the uk data hasn't been moving in the right direction. in contrast to what we see here with the european data which is still sub 50 and moving toward that positive trajectory >> it was a bleak outlook according to chris yesterday the provider of the pmi. you are absolutely right to highlight that relative to europe, the uk seems to be in a much more difficult position >> so far services is the one that is hanging in at 49.9 we will be interested to see how consumer demand will impact the numbers. the reaction in european yields today we are seeing -- this is european yields. we don't have gilts. this has been a big rally.

10-year bund was down. today, the 10-year bund is ten basis points higher. we have covered a lot of ground in the last couple days. this is the picture of the gilt. up 2 basis points in trading today. let's bring in the senior european economist from legal and general investment management good morning happy new year let's start with the inflation data from the eurozone the last couple days. i feel that is a catalyst for what we see with fixed income. it feels bond investors are pricing in continuation of the low inflation prints for them to continue trending downward and what that means for your assessment this week? >> i think the numbers we have seen at the country level are a genuine surprise at this stage

the european number we get tomorrow will be below what the consensus would have been expecting a week ago i think when you put it against the really hawkish rhetoric we had from the european central bank before christmas, it makes you think that message will be very difficult for them to unwind it will be interesting to see what policymakers make of the data we do think inflation is going to trend lower through the course of the year really, even by the end of the year, we are still going to be well above target consistent numbers in the 3% to 4% range. that's why we don't think the ecb will be in a position to stop cutting rates where maybe some of the central banks will of course, you mentioned the fed, which signaling they don't intend to. we believe the fed will cut by the end of the year. for the ecb and bank of england,

we think it will be difficult because inflation will be sticky for some time. >> you mentioned the ecb it is a really interesting set of circumstances they are faced with they decided to turn very hawkish just at the time where inflation levels started dropping sizeable and they will continue along that path as well at the same time, the growth prospects are looking better what does that do to core inflation and to wage dynamics >> i think that's really the key issue for the ecb. that is really what was behind the hawkish comments a few weeks ago. they think wage dynamics are stronger than they had been expecting at this stage of the cycle. we are confident that europe is in recession pmi has been signaling recession for some time.

the wage dynamics have been stronger of course, you know, that wage inflation spiral and second round becoming more evidence it is very interesting that the ecb revised up inflation profile despite lower energy prices and stronger euro. all things that should make the inflation profile weaker it is wages that has prompted them to be more hawkish and expect more inflation. it is hard to august against that >> where is your expectation for the ecb will end up with the terminal rate? >> i think it will end up at 3 i think markets expecting a little more from them. we have it below consensus three is where they end up as i said earlier, i don't think they will be in position to cut. they get to three and probably have to hold that as the session becomes more evidence.

maybe there will be some scope for cutting in 2024. it really does depend how sticky inflation proves to be >> super clear hatel. let me ask you about the uk if i may. hopefully you heard our short discussion of the uk pmi we spoke to the surveyor who painted a grim picture you are on the bearish side. what is consensus too optimistic in your view >> i think there are a couple of factors. we had for a while an above consensus view on inflation. that has been proven to be right. many forecasters have had to keep revising numbers through the course of 2022 also, it is the impact that higher rates have on the housing

market that is something, i think, that is under appreciated we expect a quite sizable correction in property prices. something in the region of 15% although over an 18-to-24 month period that would be the biggest correction since the financial crisis in the early '90s that is important with consumer spending that is under appreciated. the other factor is fiscal policy normally fiscal policy is trying to be supportive in recession. we know the government's hands are tied the next is the mutual fiscal policy the point of which the economy should be recovering at a higher rate inflation due to recession is when the fiscal tightening will kick in that will prevent the rapid recovery that some forecasters have we don't think that is

plausible. >> hatel, coming back to the positive side. you are looking at the fed cutting this year. ecb may cut in 2024. what about the bank of england >> the bank of england in a similar spot to the ecb. again, the last minutes from the last meeting suggested the wage data has been stronger than they expected employment continues to be stronger than expected so we think the bank of england will get to 4% because they are already at 3%. we think they will get to 4% and they also have to hold steady. potential growth in the uk is low. we have a recession and close to 3% contraction in the economy. that will not be enough of a output cap to generate that disinflation that the bank of england needs to cut rate any time soon. >> hatel, thank you for joining us

interesting views. senior economist from legal investment management. shares in ge health care rose in the debut. this is a plan to split ge into three companies with the energy segment spun off next year the ceo of ge healthcare is confident about the firm's prospects. >> one-time related issues in 2022 with covid and supply chain that everybody has been dealing with i think as we go forward from the snap-back point and abilities to give back to our levels are at historic point we are confident with the path forward. >> ey says conditions in the market should become p more favorable in the second half of the year global ipo leader told cnbc there are reasons to be optimistic. >> there is a strong pipeline of private companies looking to come to the ipo market i think what we need to look at

is we have seen in last couple months whenever the stock market conditions becomes better, you know, companies come to the market so do more favorable stock market conditions. what we are seeing is investors are now focusing on companies which are, you know, more profitable and strong cash flows. industry leaders and iconic company brand investors must have in portfolios >> joumanna, this is no surprise that the ipo market has been shut and it will be a difficult path to restarting listening to the comments there and thinking about the con conversation on "squawk box" last week is the hurdle is public markets

as long as public markets are depressed with valuation, companies will hold back you think what it will take to restart the ipo market in 2023 number one seems to be public market secondary markets and how they trade. >> i think this all boils down to the fact we are coming off a decade of very loose monetary policy easy money easy to access cash and liquidity. now we're in a different environment. things are very different from a valuation standpoint with rates of 4% and 5% and now zero. a lot of investors have to adapt to the valuation t it is going to take time to get the froth out of the market. lots of meme stock activity and now that froth is coming out

it takes stabilization for people to get involved also at more reasonable valuations >> definitely the more reasonable valuation i think the tech sector has made up the biggest ipos in recent years. with sentiment changing with tech companies and we will talk about amazon litater on. tech sector has major layoffs and years ago it was all about hiring that is different. >> it all comes back to the very beginning. if you go along the value chain, it will become more funding for these companies to raise ec funding. from that, it is lead to much later coming to market and ipos. the value change gets pushed back by months based on ultimate

investor appetite which is not there. also coming up as julianna mentioned, amazon shares higher as shthey announce 18,000 job cuts details after this break science proves quality sleep is vital to your mental, emotional, and physical health. and we know 80% of couples sleep too hot or too cold. introducing the new sleep number climate 360 smart bed. the only smart bed in the world that actively cools, warms, and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number.

welcome back to the show blackrock deferred withdrawal requests from september of the property fund in uk as it tries to re-balance the portfolio. this is the second time in as many quarters that the asset manager delayed redemptions as it comes at other firms have done the same. general management lifted the policy on wednesday. let's look at u.s. futures and see how the wall street trading session is shaping up. red on the board there similar to europe this morning muted with the magnitude this pull back after the volatile session yesterday which saw the s&p close about .75

higher led by cyclicals. nasdaq gained ground yesterday and that volatility that we were discussing at the start of the program spurred by the mixed picture of the data points out yesterday which showed the u.s. economy is slowing that is what is suggests the labor market is eincredibly tight. kevin mccarthy has laid out concessions in the bid to become speaker with ruleschange to remove him proposed by one member the move comes after mccarthy lost the sixth vote in the race to become speaker. alice alice barr has the latest from washington >> reporter: another day of chaos in the house and still no house speaker chosen leaving the people's

business on pause. >> the house stands adjourned until noon tomorrow. >> reporter: front runner kevin mccarthy trying to win over a band of far right rebels locking horns with the vast majority of gop members who want mccarthy in the top post >> i nominate kevin mccarthy >> reporter: despite huddling behind closed doors. >> we'll keep talking. >> reporter: mccarthy is no loser to overcoming the far-right revolt blocking him from becoming speaker. >> this country needs a change >> reporter: a small group of right-wing members holding firm against mccarthy and holding on to the appeal from former president trump. >> i still have the most votes >> reporter: the logjam pre

preventing any business from happening. when you look at the larger picture here, the stakes are higher this is really a fight over whether a small group or the vast majority of house republicans will have control of the agenda while republicans are in the majority for the next two years. in washington, alice barr, nbc news facebook parent company meta has been slapped with fines totaling 390 million euros the regulator concluded the data handling practices were in breach of eu laws. the first fine of 210 million euro related to violations by meta and the other was breach of the same law by instagram. turning to amazon. we have an indication that shares are up 2.4% in early pre-market trade this after amazon will cut more

than 18,000 jobs more than the initial statement from last year ceo andy jassy leaked the plans prompting him to make the announcement most cuts in stores and people and experience and technology groups >> the u.s. tech layoffs is interesting. many people -- obviously it is getting attention because tech has been on people's minds in 2022 given the pull back in the stock price. at the same time, if you think about it, it doesn't necessarily portend recession. the reason is this is a small mi mi mi microcosm. the reason is because they scaled up so massively during the pandemic a couple of weeks ago before christmas, i tweeted out a chart of amazon stock price.

it showed we are back to where we were pre-pandemic with stock price. work force is 700,000 to 800,000 bigger than pre-pandemic they scaled up massively now they are realizing earnings per share we might as well reduce operating expenses and come up with the same profit than continuing expanding. we live with the operating expenses and eat into the profit margin i think it is a simple calculus. the other thing is the stat i read in the goldman sachs piece in november and they said even if all workers employed in the internet publishing and web portal industry are immediately laid off, that would mean the unemployment rate would rise by 0.3% points. >> extraordinary to hear the numbers in terms of how much these companies have scaled up over the course of the pandemic.

that was precisely the point made by the ceo yesterday. andy jassy saying the uncertain economy is the rationale for the cuts after it over hired companies that last a long time go through phases. they are not in heavy people expansion mode every year. translating this to the stock market, our kcolleague in the u.s., kelly evans pointed out to the shuffle and reset and reset in the u.s. markets has been profound and meta has been replaced by united health and alphabet and amazon swapped spots. energy companies have performed extraordinarily well a massive reshuffle in markets i think it is because investors anticipated things like this in the tech sector. >> also, tech management is realizing you can get the same

results with fewer people. that is what is happening across the board. not just with amazon meta and twitter one of the first things elon musk came in and did was reduce the work force there it remains to be seen the impact on the performance of the company. still there is something to be said for further efficiency gains. the job market is still hot in the u.s. yesterday, we had the jolts data the number of job openings per individual is up at 1.7. pre-pandemic, that was 1.2 there are jobs available it is finding the relevant matching skill set to that job. >> i guess tying this to the labor market yesterday, the data we saw points to a slowing economy, but still incredibly tight labor market the goldman sachs stat was interesting about the layoffs and tech sector.

clearly if this does gain momentum and the economic slowdown puts more pressure on the tech giants, that could be what ultimately cracks the u.s. labor market which would not be a bad thing from the fed's perspective. >> i think in the context of how big the employment basket is, the tech sector is actually very small portion of that. something people are watching. let's look at european markets today. it is mixed. we had a better start to the year overall you see today with the ftse 100 and the spanish index are the only ones trading in the green ftse 100 up .40% cac 40 and dak down .10% next is one name we have been watching in the retail industry. strong performer and better than exp expected results the european yields with the strong session yesterday rallied 20 basis points.

10 in bund after the weaker than expected inflation prints from ge germany. you have the dollar up nearly 20 basis points at 106.18 sterling on the back foot against the dollar down .25%. 120.23 dollar trading weaker over the swiss franc. wall street futures indicate a pull back today after the solid close yesterday. we did have a volatile session in the afternoon ulti ultimately s&p closed higher nasdaq closed higher in terms of today, we are looking out for the private payroll for december, weekly jobless claims and composite pim. we are looking forward to birthday cheer joumanna, happy birthday

>> i told everybody. everybody knows it is my birthday i tweeted it >> a day worth celebrating >> 21has never felt so good. >> we are going to celebrate after the show in the studio and outside. very happy birthday. >> thank you >> thank you for sharing. >> thank you to the viewers. >> that is it for "street signs. i'm julianna tatelbaum. >> i'm joumanna bercetche. "worldwide exchange" is coming up next.

it is 5:00 a.m. at cnbc global headquarters. here is the top "five@5. a santa rally after all. stocks snap a two-day losing streak, but futures are under pressure. the latest federal reserve minutes. committed to keeping rates higher longer. and tech layoffs gaining steam. amazon's latest head count slash was not aggressive enough. 18,000 workers in the latest cuts. drama in d.c