Wall Street liked what it saw today from 73-year-old President Donald Trump and an impressive team of government health officials and private sector health care CEOs at the White House, rocketing the Dow Jones Industrials up 1,985 points or 9.6% today. Fears from the coronavirus, AKA SARS CoV-2 or Covid-19, gripped Wall Street for two weeks, dropping the Dow down 29% in bear market territory. Today’s bounce doesn’t necessarily mean it will continue, especially if the panic in the streets continues. Supermarkets around the U.S. were emptied out of supplies, while consumers panic buy not knowing what to expect in the days or weeks ahead. Wall Street breathed a little easier today, as the nation’s biggest funds take long [the weekend] positions, driving the tech-rich Nasdaq up 673 points or 9.35% an S&P 500 up 230 points or 9.29%, returning about $3 trillion of market wealth back to the market.
If the crisis worsens over the weekend, you can expect Wall Street to sell off Monday, something that’s happened before as traders try to establish long positions only to have short sellers step in to unload stocks. With over 145,244 coronavirus cases and 5,416 deaths worldwide, there’s no end in sight yet to what the World Health Organization [WHO] branded March 12 a global pandemic. While nothing’s changed since yesterday, short sellers left the market, giving way to value-buyers, looking for bargains in an oversold market. Trump said he declared a national emergency to potentially utilize $50 billion in emergency funds to combat the pandemic in the United States. Trump critics, like former Vice President and Democrat presidential candidate Joe Biden ripped the president for failed management. Yet Wall Street certainly liked what it saw today.
Reporting on the coronavirus isn’t easy in today’s hyper-partisan political atmosphere where Trump can’t do anything right for his critics. “No resource will be spared, none whatsoever,” Trump said speaking from the White House Rose Garden to the nation. Trump promised to get more Covid-19 test kits to clinics and hospitals around the country, answering his critics, like Biden. But supplying test kits won’t stop the spread of the virus, only identify more cases. China, where the SARS CoV-2 epidemic began Dec. 31, 2019, if not before, claims it only has 22 new cases over the last three days. Far more likely is that China has refused to cooperate with the World Health Organization [WHO] who’s working feverishly to maintain accurate data. It’s inconceivable that China has zero new cases, raising more suspicions. Trump’s emergency declaration opens up new funds to combat the virus.
Today’s hyper-partisan reporting, at least by the 24/7 cable news outlets, has led to mass hysteria, where panic buying sweeps the grocery industry. Watching hapless shoppers fill shopping baskets with toilet paper and bottled water shows how the media influences the public’s thinking. If you listened to Trump and his emergency management team today, you’d act more like Wall Street, who, at least today, shrugged of the Covid-19 pandemic and bought stocks again. Panic buying shows a counterproductive response to a crisis, where global supply chains, especially for basic consumer commodities, are not disrupted because of China shuttering factories. Allianz Se chief economist Mohamed El Erian, worried about the Federal Reserve Board over injecting liquidity into financial markets, creating a new asset bubble, when worries about the coronavirus settle down.
Trump’s remarks today reassured Wall Street, assembling a powerful public-private partnership to tackle the virus. Trump received partisan criticism for banning flights starting Midnight March 14 from Europe where Covid-19 has spiraled out-of-control. “Our overriding goal is to stop the spread of the virus . . .and this will pass, and we’re going to be stronger for it,” Trump said. “All Americans have a role to play” in curbing the epidemic, urging citizens to follow the recommendations of Dr. Anthony Fauci, head of National Institutes of Health [NIH] allergy and infectious disease control. Fauci urged all Americans to avoid crowds, wash hand regularly and keep at least a meter distance between yourself and others. Entertainment, theme parks, transportation, sports, schools, universities and other public venues have agreed to temporarily close until the Center for Disease Control [CDC] gives the green light..
China’s officials Xinhua news agency insists that the U.S. and other countries should follow its lead in mass quarantining for stop the coronavirus spread. China’s Foreign Ministry Spokesman Zhao Lijian accused the U.S. on Xinhua of starting the coronavirus pandemic. Chinese President Xi Jingping visited the city of Wuhan in Hubei Province March 11 to prove its no longer contagious. Xi wants nothing more than to blame the U.S. for bungling biosecurity at Wuhan’s Virology Institute, housing China bioweapons laboratory. Without access to the Internet or real news, Chinese citizens easily fall prey to Beijing’s propaganda, this time about the U.S. starting the coronavirus pandemic. Best evidence to date shows that China leaked the deadly virus from its Institute of Virology where it experiments with deadly viruses on laboratory animals, selling them into food chain.