$SPY, $DIA, $OIL
Over the past month, equity markets and financial assets broadly, have been attempting to price in the dual shock of a pandemic and the sudden collapse in Crude Oil prices
Volatility stemming from the outbreak has seen the DJIA move up or down by 1000 pts or more for 7 days running, and 11X total in the last month,. Based on the stock market’s historically steep declines over the past few weeks, some market participants have already priced in a recession
Nevertheless, markets rallied sharply Tuesday as The Trump Administration discussed further measures to help The American People and companies most hurt by the fall-out from the coronavirus pandemic, which may top $1-T.
Treasury Secretary Steven Mnuchin said during a White House press briefing that “the President wants to give cash now” to the public, and is discussing doing so in the next 2 weeks. He also said the administration “believes in keeping the markets open,” but is considering shortening market hours eventually amid the outbreak.
The US government has shown a willingness to provide at some aid to individuals and corporations most affected by the outbreak to soften the blow to the economy as much as possible.
President Trump has vowed to “back the airlines 100%,” with air carriers having been hit hard by a steep drop-off in travel demand and in desperate need of government aid to survive.
In Congress, the House of Representatives unanimously passed a revised multi-billion coronavirus emergency bill Monday evening and sent it up to the Senate for a vote.
The package would include at least $750-B to combat disruptions from the coronavirus outbreak, providing funds for hospitals, expanded unemployment insurance, small businesses and food aid.
Expect the Trump policies to work, and investor confidence to return to the US financial markets.
Have a healthy day.
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