President Trump Wants Financial Markets Open, May Limit Hours

President Trump Wants Financial Markets Open, May Limit Hours

$DIA $SPY $QQQ $RUTX $VXX

The S&P 500 extended its weekly rally by 6.2% Thursday after the Senate approved the $2-T fiscal stimulus package for the economy, which saw a record surge in weekly jobless claims. The DJIA rose 6.4%, the NAS Comp rose 5.6%, and the Russell 2000 rose 6.3%.

Thursday, US Treasury Secretary Mnuchin reiterated that he wants US financial markets to remain open even as the coronavirus continues to span volatility, adding that he is focused on helping mortgage firms expected to be hit hard by the pandemic’s spreading economic pain.

Secretary Mnuchin, speaking on a call with the nation’s Top financial regulators, said there is a consensus among federal agencies that it is “in the best interest” that trading in stocks and other assets continue. He was joined by Fed Chairman Powell, Securities, SEC Chairman Clayton and other regulatory leaders.

The past 2 weeks of major market swings triggered rumors across Wall Street that the government could halt trading.

Last week Secretary Mnuchin added to the speculation by saying that while President Trump’s administration plans to keep markets open it could shorten trading hours.

Thursday, Mnuchin clarified President Trump’s position.

We will do everything we can working with the regulators and the exchanges to make sure that the markets stay open,” Secretary Mnuchin said. “If for whatever reason we get to a point where the underlying regulators determine that the markets cannot stay open full hours, we may consider limiting the trading hours, but that is not our preference.”

Secretary Mnuchin said that he has formed a task force of regulators to deal with the liquidity shortfall that mortgage service firms may soon face. The companies collect money monthly from borrowers monthly and facilitate payments to mortgage bond investors. The obligation to compensate bond holders continues even if homeowners miss mortgage payments.

Secretary Mnuchin made his remarks during a meeting of the Financial Stability Oversight Council, a panel of regulators formed after the Y 2008 financial crisis to spot emerging threats to the US economy. Among agency heads on the Thursday call was FHFA Director Mark Calabria, who oversees Fannie Mae and Freddie Mac.

FHFA will continue to emphasize that Fannie Mae and Freddie Mac must use their limited resources to support borrowers, renters and investors,” FHFA spokesman Raphael Williams said in a statement. “FHFA does not have plans to authorize a mortgage-servicer liquidity facility for either Enterprise as they both are undercapitalized.”

Thursday, the major US stock indexes finished at: DJIA +1351.62 at 22552.23, NAS Comp +413.24 at 7796.89, S&P 500 +154.51 at 2630.07

Volume: Trade on the NYSE came in at 1.6-B/shares exchanged

  • NAS Comp YTD: -13.1%
  • S&P 500 YTD: -18.6%
  • DJIA: -21.0%
  • Russell 2000: -29.3%

HeffX-LTN’s overall technical outlook for the major US stock market indexes is now Neutral with a Bullish bias.

Looking Ahead: Investors will receive Personal Income and Spending for February, PCE Prices for February, and the final University of Michigan Index of Consumer Sentiment (MSI) for March Friday.

Have a healthy day, stay home!

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