WASHINGTON – I had every intention of writing and posting this article on what turned out to be an amazingly auspicious Friday the 13th on Wall Street. Beaten to a bloody pulp all week, the Federal government’s massive helicopter dump of $$$, which actually commenced on Black Thursday, had a transformative effect on battered markets Friday. Conducting a Friday afternoon Presidential press conference focused squarely on the administration’s proactive response to the growing coronavirus panic, President Trump ignite a YUGE bullish afternoon on Wall Street. It might have been the most fun Friday the 13th ever.
In short, Trump gave a desperately needed shot of hope and adrenelin to beleauguered traders and investors already on the verge of bleeding out. At the same time, Trump-hating Democrats, previously overjoyed by the chance that Thursday’s monster market crash and the coronavirus threat would wipe out Trump’s re-election chances this fall, found their hopes shattered once again. Maybe Russia helped Trump again, they figured.
A YUGE bullish afternoon on Wall Street as stocks soar
Stocks opened up way over 1,000 Dow points before wobbling and looking like they’d collapse yet again. But then, something changed. Something the online investing site TheStreet, readily grasped.
“Heading into Friday, it looked like the S&P 500 was set to potentially post its worst week on record – until President Trump’s late-in-the-day news conference Friday assuaged coronavirus concerns, sending markets ripping higher in one of the largest single-day percent gains on record.
“Now, with some time for Mr. Market to digest over the weekend, the big question is what happens next.”
A memorable Friday afternoon Presidential press conference and data dump
We’ll leave that question for a moment and briefly recap President Trump’s highly successful Friday press conference / information dump as synopsized by CNBC.
“To unleash the full power of the federal government … I am officially declaring a national emergency,” Trump said. “Two very big words.”
“Trump said he expected the U.S. to have 1.4 million coronavirus test kits available within a week, and a total of 5 million kits within the next month. He then said he doubted the country will “need anywhere near” 5 million kits.
“The president said there will be a “drive-thru” option for the tests, so that people can stay in their cars when they are screened for the virus.
“He said he had ordered all states to set up emergency operation centers, and urged hospitals to engage emergency operation plans.
“The president said the emergency declaration will grant new authority to Health and Human Service Secretary Alex Azar to waive several rules governing how hospitals take in patients, and how long they can stay.”
A bit of gratuitous gasbaggery and political hackery from Chuck Schemer
New York’s Senator and Senate Minority Leader Chucky Schumer claimed that the Empire State had already outdistanced the President on this issue.
But then, of course, being Chucky Schumer, he next delivered the following addendum of hyper-partisan, paranoid crap.
“As other steps are considered, the president must not overstep his authority or indulge his autocratic tendencies for purposes not truly related to this public health crisis.”
Schumer, House Speaker Nancy Pelosi, and the bulk of a once great Democrat Party have forgotten that US leaders are supposed to get behind their president in times of crisis to help unite the country. But even in this case, here’s Schumer sneering and snarking away like a high school “popular kid” who always looks down on his inferiors and never has a kind word to say. So much for national unity. What a cheap shot. But the President got the last laugh, punishing Schumer with that memorably YUGE bullish afternoon Friday.
End of soapbox counter-punch.
The Trump effect was majorly in evidence at Wall Street’s closing bell Friday
As far as that question we skipped on what Mr. Market did next after the President’s successful 3 p.m. news conference, here’s CNBC again for some color on the topic.
“Stocks rose sharply in volatile trading Friday as Wall Street rebounded from the sharp losses suffered in the previous session — the worst since the “Black Monday” market crash in 1987.
“The Dow Jones Industrial Average closed 1,981 points higher, or 9.4%. The S&P 500 was up 9.2% while the Nasdaq Composite surged 9.3%. The averages posted their biggest one-day gain since October 2008.
“Equities rallied to their session highs after President Donald Trump also said 50,000 new coronavirus tests will be available next week. Trump also said he asked the Energy Department to purchase oil for the U.S. strategic petroleum reserve, boosting oil prices.
“Stocks surged on the possibility of fiscal stimulus from the U.S. government and others around the world. Treasury Secretary Steven Mnuchin told CNBC’s “Squawk on the Street” the White House and Congress were nearing a deal. “The president is absolutely committed that this will be an entire government effort, that we will be working with the House and Senate,” Mnuchin said. The Federal Reserve also released more details on its funding measures on Friday.”
Since this CNBC article appeared, BTW, the House passed its coronavirus bill late on Friday the 13th. Subsequently, it headed off to the Senate for presumably deliberation and either reconciliation with the House or even a quick vote by Monday.
Money, credit and the lagging Fed response
Regarding money and credit, which is arguably a worse economic problem right now than the coronavirus, speculation here is that the Federal Reserve will announce yet another rate cut next Wednesday after its monthly meeting concludes. Trump seems to think additional cuts should have happened before a month of yesterdays, however. And last week’s stock market horror show seems to have proved the President right yet again.
We’ll watch where US futures go next, starting sometime Sunday evening, since futures usually take their cue then from the action in Asian markets where it’s already Monday in the a.m. After about 10:30 p.m. ET is when futures numbers will begin more accurately to gauge what we’re likely to see Monday morning at this hemisphere’s 9:30 a.m. opening bell.
So what comes next after that YUGE bullish afternoon that concluded this week’s wild market action? Most optimists, like this writer, would prefer to see that phenomenal Friday the 13th bull run continue with even greater vigor next week. And maybe it will. For awhile. But since we’ve already penetrated bear market levels in all three major averages, it’s likely we’ll have a bumpy ride for at least the rest of March. And perhaps for the entire second quarter as well.
So let’s all keep those seatbelts fastened.
– Headline image: Democrats liked Thursday’s market crash better than Friday’s YUGE Trump-inspired rally. Cartoon by Branco. Reproduced with permission and by arrangement with Comically Incorrect.