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By Denny Gulino
THE WHITE HOUSE (MaceNews) – It’s been something to behold, how the United States is cautiously adjusting at every level to the threat of the corona virus – and how the stock markets have disregarded official reassurances.
Day by day, in an orderly manner, the collapse of share prices has proceeded, interrupted by spasms of optimism but overall ratcheting down farther and farther. In private-sector board rooms corporate analysts, strategists and economists have been delivering unbounded pessimism.
Meanwhile the chart of daily deaths from the virus worldwide keeps steepening. Total deaths worldwide by Thursday evening were 4,970, up by 332 from the say before. Wednesday the total was up 8% for the day, Tuesday by 7%, Monday by 5%. Extrapolating that curve explains the worldwide fright that is permeating America.
Broadway theaters, California’s Disneyland, trade shows, the NHL and tens of thousands of gatherings across the country canceled Thursday, as drive-time traffic thinned out in major cities. The capital’s Metro system had 100,000 fewer riders than the day before.
On both sides of the Atlantic share prices fell by the most since 1987. Unlike 1987, U.S. stock price convulsions have become routine and successive huge declines have done more damage faster than ever. The trading circuit breaker, a 15-minute trading halt, was triggered for the second time this week shortly after the session began by losses hitting the 7% threshold.
Stock prices on the three major indices lost 16% just this week so far, 23% since hitting their all-time highs last month. Thursday was the worst on record for European stocks, hit hard by the surprise travel ban imposed by the U.S. beginning Friday midnight.
Several companies that had withdrawn earning forecasts in view of the uncertainties went the next step and slashed dividends, a trend seen broadening as earnings disappear along with cash flow and customers.
In the credit markets the day’s volatility was much more narrow than in stocks and Treasury market yields generally rose somewhat, reversing what many analysts said has seemed to be an inexorable descent toward negative rates.
The New York Federal Reserve helped by announcing it is pumping $1.5 trillion – with a “T” – into the money markets beginning in the afternoon over just two days. That buoyed stocks, at least until traders realized it was not necessarily a bout of emergency quantitative easing, just the application of a massive plumber’s helper to flush liquidity into the system. Another trillion is apparently on the way next week.
The Fed said it is broadening its purchases to include more of the Treasury yield curve as well, giving reporters much more to ask Chair Jay Powell about at his press conference following next Wednesday’s Federal Open Market Committee meeting. It’s a meeting which will generate another “dot plot” of participants’ assumptions despite the deep uncertainty.
Meanwhile Google searches keep climbing for the Spanish Flu Wikipedia entry, about the pandemic that killed 50 million worldwide. It lasted two years to 1920.
Still many of this week’s cancellations have come with exceptionally short-term time limits, often in ending in April, as planners shared President Trump’s optimism he voiced once more Thursday.
On his ban on incoming Europeans starting Friday, “Hopefully we can get it back very quickly,” citing the way China says it is recovering. “It’s just a question of time … . It will go very quickly.” On social distancing, “We need separation for a little period of time in some cases.”
Asked why he did not consult with the Europeans before announcing the travel ban Wednesday night, Trump said there wasn’t time. Besides, he said, they have raised taxes on the U.S. on occasion without consulting him. The U.K., which is still threatening to impose a tax on U.S digital earnings, was not included in the travel ban.
Trump said he will probably cancel his “sold out” MAGA rally set for next week in Tampa after Wednesday canceling rallies in Nevada and Colorado.
Asked about declaring some version of a national emergency, an increasingly frequent recommendation from private-sector experts, Trump said he is familiar with – in fact has “memorized” – what he said are his extensive powers under the 1988 Stafford Act to funnel federal aid to states and localities. He is not ready to use those powers.
“I have the right to do a lot of things that people don’t even know about,” he said. He might use the Act, he said, to authorize “some of the more minor things at this point.” Through the half hour he kept answering questions, Trump resisted any inclination to project extreme urgency.
”We’re in great shape compared to other places,” he said. “We’re in really great shape and we want to keep it that way.”
The administration is considering ways to supplement income for wage earners who need to stay home, including wait staff whose income in largely from tips. ‘Nobody thinks about them,” he said.
On Capitol Hill wrangling continued into the night in the House and Senate on legislation that would provide paid sick leave, free coronavirus testing, enhanced unemployment benefits, food for children kept away from school and free lunches, more federal funds for state Medicaid programs and a variety of other assistance.
Senate Republican Leader Mitch McConnell called the Democrats’ plan an “ideological wish list” and said he would rather pass separate small-scale aid measures than one all-encompassing bill.
House Speaker Nancy Pelosi said she did not want to cancel members’ 11 days off set to begin later in the day and stick around the Capitol just because the Senate disagrees with House virus-bill language. However House members are well aware they could be kept in the Capitol for further negotiations, perhaps into the weekend.
Members of Congress have become surrounded with suspected cases of the virus, among them that of Sen. Lindsey Graham and several others who were at least in some proximity to confirmed cases.
The Capitol, Supreme Court, White House and Smithsonian museums were all closed to tourists during the day, disappointing many, many busloads of school children. Some had traveled for many hours from across the country to now see monuments from the sidewalk, museums from a distance. Reporters, lobbyists, staff and family can still get in to the Capitol.
Of the Capitol closing, the NIH’s Tony Fauci told a congressional committee, “That’s a really, really good idea to do.”
The White House said it is aware of reports Trump was close to a Brazilian official at Mar a Lago who has COVID-19. “Both the President and Vice President had almost no interactions with the individual who tested positive and do not require being tested at this time,” a statement issued in Press Secretary Stephanie Grishman’s name said. Trump, asked about it, said he is “not concerned.”
Trump did acknowledge the corona virus “is a very fast spreader” as he sat with the prime minister of Ireland, in for a traditional St. Patrick’s day visit. Also there in the Oval Office was the new Special Envoy to Northern Ireland Mick Mulvaney and his successor as White House Chief of Staff Mark Meadows, who’s no longer quarantining himself.
Trump’s frequent use of the word “quickly” and “little period of time,” his constantly repeated praise for his own early actions in blocking entrants from China, is not sitting well with what now seems to be a legion of non-government medical experts who have been talking on every cable news channel through the day. Their theme is that the jury is still out on how well the United States is doing with comparatively little testing done for the virus five weeks since its spread became evident.
The recurring warnings about “exponential spread,” now being seen in Italy and Iran, has prompted nightmare visions of U.S. medical systems overrun within weeks as doctors are forced to choose who gets comparatively scarce respirators and hospital beds.
The NIH’s Fauci, the acknowledged best source of virus information, said that anyone who shows symptoms should not rush to their doctor’s office. Call ahead and they’ll tell you what to do.
Fauci’s warning Wednesday that corona virus lethality – fatalities – could be 10 times that of influenza was repeated many times Thursday. Two seasons ago influenza killed more than 60,000 Americans. Three seasons ago it was more than 79.000. This season so far at least 16,000 have died.
Said Trump, “I think it’s going to work out very well for everybody.”
Governors and mayors continued Thursday to take the initiative and prescribe far more rigorous virus defenses than being recommended by the federal government.
Asia stock markets opened Thursday evening the same way they did Wednesday, down severely. Japan’s Nikkei was off 4.4% early on.
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Contact this reporter: denny@macenews.com