Coronavirus shows problems with Trump’s stock market arrogance

Coronavirus shows problems with Trump's stock market arrogance

There is a reason most presidents are cautious when talking about the stock market. This week, President Trump is learning the hard way.

He, in fact, faces the scourge of spending the past three years personalizing much of what happened in the market and the economy, saying that the high stock standards under his watch are a reflection of his special skills and a central part of his case for re-election in November.

Most presidents avoid boasting about rising stock markets because they know how fragile it is, and how their share prices are too low to control, and how share prices can move sharply out of control, or sometimes without any clear reason.

The cost of claiming personal credit for the profits of the stock market comes when you suffer the loss of the stock market. And this is particularly relevant after a 7 percent drop in the S&P 500 from the top last Wednesday, with Wall Street acknowledging that the spread of the coronavirus appears to disrupt the global economy.

The outbreak of a new type of coronavirus in China and its spread to other nations could not prevent Mr. Trump. But even as public health officials begin to warn that many Americans may be infected, the Trump administration has spent a lot of effort talking to the stock market.

“The stock market looks pretty good to me!” The president tweeted after the market closed after falling 5.5 percent on Monday afternoon.

It dropped an additional 3 percent on Tuesday.

If sales continue, this could reduce the key pillar of the president’s re-election pitch. It could be less of a problem if Mr Trump didn’t talk so frequently about the stock market as a real-time barometer of his presidential success.

But there is more to the risk than public relations. The administration’s attention to market optics distracts them from even greater work – there is also a risk that a global pandemic is trying to prevent the potential spread of infection and fatalities.

Ideally, even financial companies that do not have the expertise to transmit the disease would spend their time trying to understand what industries are most likely to suffer, and whether government could help them in the face of supply chain disruptions and other adverse effects. Virus.

  • Updated February 25, 2020

    • What is coronavirus?
      It is a fancy virus named for the crown-like spikes that extend from its surface. Coronavirus can infect both animals and humans and can cause various respiratory disorders, ranging from common colds to more dangerous conditions such as severe acute respiratory syndrome or SARS.
    • How infectious is the virus?
      According to preliminary research, it appears to be infectious in essence, the equivalent of starch and probably spread through sneezing, coughing, and contaminated surface. Scientists estimate that every infected person can spread it somewhere between 1.5 and 3.5 without effective control measures.
    • Where is the virus spread?
      The virus, which originates in Wuhan, China, has infected more than 6,000 people in at least 5 countries, including Italy, Iran and South Korea.
    • Who is working to contain the virus?
      World Health Organization officials are working with Chinese officials, where growth has slowed. But this week, as confirmed cases on two continents, experts warned that the world was not ready for any major outbreak.
    • If i’m traveling
      CDC Has been Alerts older and at-risk travelers Avoid Japan, Italy and Iran. The company also advised against all unnecessary travel to South Korea and China.
    • How do I keep myself and others safe?
      The most important thing you do is to wash your hands frequently while you are at home while you are ill.

On Tuesday afternoon, the White House economic adviser, Larry Kudlow, interviewed on CNBC in the midst of a sell-off and focused on talking to the market.

“The story of the virus doesn’t last forever,” he told the “Exchange.” “To me, if you are an investor there and you have a long-term vision, I would suggest taking the market very seriously; Stock market, it’s a lot cheaper than a week or two ago “”

He then suggested that the virus would spread and fear that the US economy would be misplaced.

“We’ve been holding it,” Mr. Kudlow said. “I can’t say airtight, but it’s very close to airtight.”

This is not what public health officials said at the briefing that afternoon.

“It’s not so much a question of whether it will happen anymore, but more about when it will happen,” said Nashi Masonnier, director of the National Immunization and Respiratory Disease Center.

“We’re asking the American people to be prepared for the worst,” he added.

The attempt was clearly to give markets an optimistic tone, with what public health officials see as necessary in order to mitigate the potential epidemic.

“It is understandable that in the election year, the administration focuses on keeping the stock market and the economy healthy,” said Michael Steele, a partner at Hamilton Place Strategies and a former spokeswoman for House Speaker John Bohner, “but they are more likely to focus on the virus’s economic impact than on effective public health systems. Risky to do. “

Then there are the broader questions of credibility. During the global financial crisis in 20, White House and Treasury officials were acutely aware that if they were too enthusiastic about public comment on the crisis, it would reduce their credibility and market sentiment that they were taking this threat seriously.

When the government announces an important good news to solve a crisis – whether banks have sufficient capital or pandemics – you want people to believe it, if they do the same, only if the same government is leading the reality that the crisis begins. Neither the president’s tweets nor Mr. Kudlow’s interviews suggest the administration is overly worried about the idea.

Let a company face a major crisis, such as the withdrawal of the protection of its products, which results in a plunging stock price.

If the working team spends all their energy on TV complaining about falling stock prices, it probably won’t do very well. If the team instead tries to solve the security problem by ignoring the share price for some time and trying to show consumers that the company is trustworthy, it can still take some time to recover the stock, but in the end it probably does.

The risk to the United States is that the Trump administration’s pursuit of the election-year politics and the privatization of the market follow a bit more like the first strategy.

Recommended For You

admin@headlinesbytes.com'

About the Author: Ava

Leave a Reply

Your email address will not be published. Required fields are marked *