Trump’s ‘Business as Usual’ Virus Strategy Fails to Calm Markets

By Justin Sink, Bloomberg - March 9, 2020

Excerpt below...

U.S. stocks plunged about 5% on Monday, whipsawing back from losses that topped 7% and triggered a trading halt. Financial markets already on edge over the coronavirus were further rattled by a crude oil price war, leading Treasury yields to plummet, oil to sink more than 30% and buckling credit markets.

Trump has not spoken at length to reporters -- or to everyday Americans worried about the virus or their retirement accounts -- since Friday, when he toured the Centers for Disease Control and Prevention in Atlanta. His communications instead have been limited to Twitter: He blamed the falling market on a spat between Russia and Saudi Arabia over oil prices. He declared his predecessor Barack Obama the most corrupt president in history.

Trump’s Style

Trump’s combative rhetorical style could backfire with skittish investors, said David Kotok, Cumberland Advisors’s chief investment officer.

“In times of crisis, the one thing you don’t want is combative, divisive political style,” Kotok said. “Trump, through this morning, hasn’t changed his behavior.”

But he said investors were now looking for quick government interventions, and that a “massive” fiscal stimulus would likely be necessary.

“We are in a time when governments must act because they are expected to. In the financial crisis 11 years ago we saw government actions and they were learning how to act quickly,” Kotok said. “Prior to that government interventions came more slowly but we’re in a world now where government interventions have to come quickly.”

Read the full article at Yahoo Finance: https://finance.yahoo.com/news/trump-business-usual-virus-strategy-164532903.html

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