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Stock drift lower as earnings kick off, Delta, JPM soar



Markets moves on Wall Street were muted Tuesday, with U.S. stocks holding near record highs as investors looked to an onslaught of corporate earnings and economic data later in the week.

11:15 a.m. ET: Tame CPI masks surging health inflation

Rising health care costs, by year

December’s relatively muted inflation data hid some pockets of inflation — notably in health care. As JPMorgan economist Daniel Silver points out:

Medical care inflation also had another strong month in the CPI report, rising 0.6% in December, and included a record-large 2.1% surge in prescription drug prices. The medical care CPI increased 4.6% oya in December, but inflation has been much softer in the related PCE price measures (generally less than 2% in recent years through November), and this difference has contributed to core CPI inflation outpacing core PCE inflation lately.

Year over year, changes in prescription drug prices

10:54 a.m. ET: Investors cheer ‘King Dimon’ after JPM’s big Q4

IMAGE DISTRIBUTED FOR JPMORGAN CHASE & CO. – Jamie Dimon, Chairman and CEO, JPMorgan Chase, discusses Future of Work at JPMorgan Chase event on Monday, March 18, 2019 in New York. (Adam Hunger/AP Images for JPMorgan Chase & Co. )

JPMorgan’s (JPM) stock is up 2%, testing session highs after a blowout fourth quarter capped a record year for the bank — boosted by big gains in fixed income (FICC) trading and consumer credit.

Noting that JPM “kicked off earnings season with a bang,” OANDA’s senior market analyst Edward Moya applauded the leadership of CEO Jamie Dimon (Wall Street’s longest-serving bank chief):

“JP Morgan posted a stunning FICC trading gain, over a billion dollars higher than analysts’ expectation.  First quarter guidance was strong regarding net interest income and shares for the largest US bank were sharply higher.  JP Morgan remains best of breed in banking and Dimon should feel like the king of FICC trading.”

10:45 a.m. ET: More bad news for Boeing

FILE – In this Monday, Dec. 16, 2019 file photo, a Boeing worker walks in view of a 737 MAX jet in Renton, Wash. Shares of Boeing fell before the opening bell on a report that the company may cut production of its troubled 737 MAX or even end production all together. (AP Photo/Elaine Thompson)

The embattled aerospace giant posted its worst annual net orders in decades on Tuesday, as the 737 MAX fiasco drove plane deliveries to their lowest in 11 years.

Allowing for cancellations and changes to earlier orders, Chicago-based Boeing said it had received just 54 new orders for planes in 2019 and delivered less than half as many as a year earlier. As a result, it lost the top spot to Airbus, its European rival, for the first time in eight years.

10:43 a.m. ET: Microsoft stock unfazed after Amazon files lawsuit challenging Pentagon contract

A court filing Monday showed Amazon (AMZN) was seeking to temporarily block Microsoft (MSFT) from working on a $10 billion cloud contract the Department of Defense awarded the computer software company last year.

Amazon was previously seen as a front-runner to land to contract, and claimed it lost out on the Joint Enterprise Defense Infrastructure Cloud (JEDI) contract due to improper political interference from President Donald Trump.

The temporary restraining order would prevent Microsoft from working as part of the contract until a federal court issues a decision on the JEDI deal on February 11.

10:21 a.m. ET: Beyond Meat shares jump nearly 10%

Shares of Beyond Meat (BYND) were up by almost 10% about an hour into Tuesday’s session, extending gains from pre-market trading after reports the plant-based meat substitute-maker was considering expanding into China.

Xinhua, China’s state-run news outlet, reported that Beyond was considering tapping the mainland China market this year, citing an interview with the company’s executive chairman Seth Goldman on the sidelines of Retail’s Big Show 2020.

Trading was halted for Beyond’s stock a few minutes before 10 a.m. ET due to heightened volatility, but resumed shortly thereafter.

The high-flying, newly public company saw its stock surge to as high as $239.71 a share last year and are now trading around $125 apiece. The stock is up more than 60% for the 2020 calendar year to date.

9:35 a.m. ET: Stocks tick lower around market open

The three major indices opened slightly to the downside Tuesday morning as corporate earnings results began rolling in.

JPMorgan led advances in the 30-stock Dow after posting record revenue and net income in the fourth quarter.

Here were the main moves in markets, as of 9:35 a.m. ET:

  • S&P 500 (^GSPC): -0.13% or -4.24 points to 3,283.89

  • Dow (^DJI): +0.02% or +7.2 points to 28,914.25

  • Nasdaq (^IXIC): -0.11% or -10.39 points to 9,262.19

  • Crude oil (CL=F): +0.67% or +$0.39 to $58.47 a barrel

  • Gold (GC=F): -0.44% or -6.8 to 1,543.80 per ounce

8:30 a.m. ET: Inflation tame in December

Consumer prices rose by a modest 0.2% in December, Labor Department data showed on Tuesday, moderating slightly from the prior month and half the pace of October’s jump. The data should comfort the Federal Reserve as it looks to keep rates on hold to encourage growth.

Excluding volatile food and energy prices, CPI rose 0.1% month on month, or slightly below expectations for a 0.2% increase. But over last year, this core measure of underlying price changes matched expectations, rising 2.3%.

8:30 a.m. ET: A tale of two banks: Wells Fargo and Citigroup

JPMorgan’s record Q4 sets the tone for Tuesday’s trading, Wells Fargo (WFC) and Citigroup (C) brought up the rear — with starkly different results. Citi saw profits surge 15% during the waning months of 2019 as credit and an eye-popping 49% spike in fixed-income trading activity bolstered the bottom line. Yet Wells Fargo suffered a startling 55% profit slump, hurt by the hangover of low rates and regulatory scandals.

WFC’s stock swooned by over 2%, while Citi’s edged higher in pre-market action.

7:50 a.m. ET: Delta profits from Boeing’s 737 MAX woes

An airport worker guides a Delta Air Lines Airbus A319-100 plane on the tarmac at LAX in Los Angeles, California, U.S., January 6, 2020. REUTERS/Lucy Nicholson

At least one beneficiary has emerged from Boeing’s ongoing mess with its flagship plane. Airline giant Delta (DAL) posted fourth quarter profits that beat Wall Street’s estimates — citing an influx of customers that fled rivals because of canceled flights stemming from the 737 MAX’s grounding. The stock surged over 4% in pre-market action from Monday’s close.

7:45 a.m. ET: JPMorgan shares rise after big Q4 earnings beat

Shares of JPMorgan Chase (JPM) jumped more than 1.5% in early trading after the largest U.S. bank by assets reported much stronger than expected fourth-quarter results.

Here were the key figures versus the expectations, according to analysts polled by Bloomberg.

CEO Jamie Dimon highlighted a more constructive geopolitical and macroeconomic backdrop as helping buoy the bank to record revenue and net income in the fourth quarter.

“While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year,” Dimon said in a statement. “The U.S. consumer continues to be in a strong position and we see the benefits of this across our consumer businesses.”


7:36 a.m. ET: Stock futures hug the flatline as earnings kick off

U.S. stocks futures drifted Tuesday morning as investors digested an early set of corporate earnings results, mostly from major financial institutions.

Contracts on the S&P 500 hovered near Monday’s record levels, boosted by optimism surrounding U.S.-China relations after the Trump administration dropped China from a watchlist for currency manipulation.

Here were the main moves during the pre-market session, as of 7:36 a.m. ET:

  • S&P futures (ES=F): 3,288.75, down 1 point or 0.03%

  • Dow futures (YM=F): 28,892, up 21 points or 0.07%

  • Nasdaq futures (NQ=F): 9,081.25, down 7 points or 0.08%

  • Crude oil (CL=F): $58.45 per barrel, up $0.37 or 0.64%

  • Gold (GC=F): $1,543.20 per ounce, down $7.40 or 0.48%

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 8, 2020. REUTERS/Brendan McDermid

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What will everything look like after the coronavirus




Will we ever shake hands again? Or hug?

Yes. Though we may do so a little less often—and with some trepidation.

The coronavirus has turned life upside down, and when it’s over—which seems far off and even worse, indeterminate—our lives will be changed permanently. That’s always the case after an economic crisis like the Great Recession of 2008-2009 or the stock market crash of 1987. It’s even more true following major turning points in history like 9/11, World War II/the atomic bomb and the Great Depression.

The cause and effect is axiomatic and Newtonian. The bigger the cause, the greater the effect. 

Clearly this is a biggie. 

My point is the pandemic and its aftermath will be super-consequential for how we live the rest of our lives. It’s not too soon to think about that, in fact it’s responsible to do so—even though the virus has yet to peak—if only to take our minds off the never ending river of difficult news.

In its essence a post-pandemic world, (or really one where we acknowledge and accept that pandemics can and will occur—more on that from Dr. Mehmet Oz below) is about mitigating a new type of risk. There will be implications across the board; for business,  government, culture, sports and the arts, as well as behavior like shaking hands.

Let’s start with some first order effects for commerce, and move on from there.

First many businesses that are booming during the pandemic will continue to thrive, maybe not explosively, but should grow above trend for some time. People are already busy figuring out the new, new things.

“I think the next generation of amazing companies will be invested as we come out of this,” Mark Cuban, billionaire entrepreneur and owner of the Dallas Mavericks wrote us in an email. “Someone will have a unique and compelling vision of what the world on the other side can look like that will make us all wonder ‘why didn’t I think of that?’”

Let’s run quickly through the obvious to get your juices flowing: Teleconferencing and remote working tools; (Zoom—the No. 1 downloaded app for iOS—Skype, Teams, Slack, Hangouts, WebEx, etc.) Medical supplies and medicine, (masks, gloves, gowns, ventilators, rubbing alcohol, and then, huge, vaccines.) Cleaning supplies, (I know Clorox has outperformed the market by 30 percentage points year-to-date and still has a P/E of 27, but you have to figure CLX and its ilk will do well over the next five to 10 years.) 

Clorox bleach disinfecting wipes on shelf in grocery store, graphic element on black

Streaming services like Netflix of course and the other FANGS as I wrote about last week are generally well-positioned. Same for meal kits, grocery and food delivery, and digital cooking and weight loss ideas. Ditto for exercise-from-home programs like Mirror and Peloton etc. (NB: The great TP hoard of 2020 will end at some point.)

By the way, while some may continue working from home, most will run screaming from the house—15 pounds heavier—back to work when that all-clear bell sounds. As many of us are figuring out, WFH can be significantly more stressful than the office. “People see staying home has lots of advantages, but people want to see other people,” says Kathleen Day, an author and lecturer at the Johns Hopkins Carey Business School. “Who knew grocery shopping could be a social activity?”   

On the flip side of the companies that will make out, are those that will suffer. Mark Penn of the Harris Poll says many Americans won’t fly even six months after the virus is mostly gone. “People see airports and particularly planes and they really fear that,” Penn told me. “Airlines are going to have their job cut out for them.” More so with cruise ships of course, as well as hotels and resorts and all the millions of jobs associated with them. 

(Domestic vacation locales, accessible by car, will be big.)

Then there’s the restaurants. While the big chains; Subway, McDonald’s, Starbucks and KFC have the wherewithal to survive, many independent restaurants could be decimated. In all cases, it’s likely prices will go up to cover new unemployment protections that companies will put in place voluntarily or that are mandated by the government. That could prove  to be inflationary.

[See also: An Update From the Yahoo Finance Live Team]

What about entertainment? “Do I think people will return to movies? Sure. Do I think people will return to theme parks? Sure,” says Rich Greenfield, equity entertainment industry analyst at LightShed Partners. “Do they open up to vastly different volumes of people, given fears around or once ingrained on social distancing in people’s heads. How quickly does it disappear?”

Greenfield says that linear TV is up (ABC’s “World News Tonight” had 12 million views last week, its biggest numbers in 20 years, as much as Monday Night Football) but streaming is exploding. “This is like putting lighter fluid on things, acceleration in terms of trend,” he says. The new reality is putting even more pressure on Hollywood’s theatrical window, which was already under assault, he says.

As for music, digital concerts are already taking off. (Over 3 million people viewed a Dave Mathews concert produced by Yahoo parent company Verizon on Thursday.) How will these be monetized? Someone’s working on that. Live concerts will return of course, but streaming concerts won’t disappear either. Personal concerts, which we’ve seen by the likes of Yo-Yo Ma, John Legend, Bono, Pink and regular musicians from their homes may become ordinary.

A teenager watches Sienna’s online concert at her home following the recommendation of staying at home to fight COVID-19 on March 13, 2020 in Madrid, Spain. ‘#yomequedoencasa’ is a streaming music festival promoted by more than 40 Spanish artist to entertain people who has to stay at home due to COVID-19. (Photo Illustration by Carlos Alvarez/Getty Images)

‘Supply chains are changing’

Let’s turn to government and politics. A few huge points here. A) The government, especially the federal government will be playing an outsized role in our lives for years to come. (It’s ironic of course that big government will return during a GOP administration—not in the DNA don’t you know.) 

And B) The election in November and the voting process will be high stakes. Some of us may not be healthy enough to go to the polls, and we must be able to vote electronically or by mail. This will not be a one shot deal either. (In fact everything that we had been migrating to electronically, DMV, depositing checks, and shopping will get a massive push from this crisis.)

Another critical point: The dividing up we’ve seen over the past five years will accelerate. Even within the U.S. we’re now seeing states and municipalities screen outsiders. The president wants to rate counties. And more Americans are sick in blue, i.e., populous states than red, i.e., rural ones. All this separates us. 

And of course globally we’re seeing a day-by-day closing down of borders. Russia, China, Australia and the U.S. are all making it increasingly difficult for mostly humans, but goods and services too, to flow back and forth. This will abate at some point, but we’re not going back to where we were.

The economic implications are obvious: “All of these supply chains are changing,” says Shulamit Kahn, economics professor at Boston University. “We’ll be sourcing materials more from our own countries.” Remember this is what Donald Trump and his supporters always wanted. Maybe they should be careful of what they wish for. Yes squeezing the global supply chain helps some domestic businesses, but it will likely result in higher prices (that again) for everyone. Plus who-knows-what other consequences.

A million smaller effects will come to the fore too. Walmart says it’s selling more tops than bottoms as people want to be (partly) dressed just for a Zoom call. (How would anyone have figured that out?)  WMT also says it’s selling tons of popsicle sticks for home-crafters (i.e., keeping kids—and parents sane.) Christopher Denby, CEO and founder of Advisory Board for the Arts expects “a huge amount of coronavirus-themed art in the next two years, he says. “Think about the AIDS crisis for instance and the impact on art and extraordinary pieces of filmmaking and theater and music that came out of that crisis.” 

And maybe, just maybe Kahn says, we’ll learn to take science more seriously. “If we find something to kill the virus, it will help people realize we need science and scientists,” he says. “What I’m hoping is people will fill in the dots and say, you know, maybe global warming is the same kind of thing.”

In a way we were living on borrowed time, weren’t we? Whether it’s global warming or pandemics, we simply must prepare better. Leaving aside the tragic and incalculable human cost, if we had spent $200 billion preparing for an epidemic like this, we might not be spending $2 trillion on a stimulus package.

Here’s what Dr. Oz told me recently: “It’s hard to imagine not having another virus like this that’s more dangerous. That’s why this is a dry run. We gotta get it right, now. So next time it happens, everyone does the same thing. We’d have the same hymnal, the same notes.”

Amen, doctor. Amen.

We can’t go back to a world before coronavirus. Wouldn’t it be amazing if we ended up in an even better place? 

 This article was featured in a Saturday edition of the Morning Brief on March 28, 2020. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.

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Donald Trump’s chaotic coronavirus crisis




Only four weeks ago, Donald Trump was brimming with confidence that the coronavirus pandemic would have little impact on the US. “It’s going to disappear,” the president said at the White House on February 28. “One day it’s like a miracle, it will disappear.”

Just how wrong that prediction turned out to be was made clear by three statistics released on Thursday. The US has overtaken China to have more cases of the virus than any other country, with its death toll now more than 1,300.

The government announced that 3.3m people filed jobless claims in just the previous week — almost five times the previous record — after shutdowns across the country have brought much of the economy to a halt. And in New York, which is fast becoming one of the global epicentres of the disease, the city’s emergency services received more medical calls than they did on September 11 2001.

Across the country, governors and mayors are pleading for help from Washington to secure more ventilators and other medical supplies and imploring residents to stay at home to prevent the spread of the virus.

Mr Trump’s response has been to float the idea of reopening the economy by Easter. “You’ll have packed churches all over our country,” he told Fox News on March 24. “It’ll be a beautiful time.”

This is the split-screen crisis that Americans are witnessing — a tussle of facts and narratives that is shaping the way the federal government manages the pandemic, the outlook for the economy and November’s presidential election. On the one hand, there is a relentless flow of grim news as the disease takes hold in America’s cities. “We’re now looking at a bullet train, because the numbers are going up that quickly,” Andrew Cuomo, the Democratic governor of New York, warned this week.

But the view from the White House is very different. With his eyes firmly fixed on his re-election prospects, Mr Trump has held daily news conferences where he has regularly played down the seriousness of the pandemic.

Mandatory Credit: Photo by Yuri Gripas/POOL/EPA-EFE/Shutterstock (10595000an) Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci reacts as US President Donald J. Trump leaves after his press briefing on the Coronavirus COVID-19 pandemic with members of the Coronavirus Task Force at the White House in Washington, DC, USA, 26 March 2020. White House Coronavirus Task Force press briefing, Washington, USA - 26 Mar 2020
Director of the National Institute of Allergy and Infectious Diseases Anthony Fauci reacts as Donald Trump leaves after his press briefing on the pandemic on Thursday © Yuri Gripas/EPA

The almost farcical nature of the situation was highlighted last week when Anthony Fauci, a world renowned infectious diseases expert who serves on the coronavirus task force, was asked how he could stand at the White House podium as the “representative of truth and facts” when the president was providing misleading information.

“I can’t jump in front of the microphone and push him down,” a very blunt Mr Fauci told Science magazine.

Some of Mr Trump’s harshest critics had comforted themselves with the idea that while they saw the leader as incompetent, at least the US had not faced an existential crisis during the three years he has been in charge. But the coronavirus crisis has exposed how a president whose trademark response is bluster is ill-prepared to deal with a pandemic.

“Trump’s uneven, confusing, chaotic, self-centred and often ignorant bragging is prompting a growing chorus of criticism from scientists, healthcare professionals, the press and more,” says David Gergen, a Harvard Kennedy School professor who has advised four US presidents from Richard Nixon to Bill Clinton. “He thinks that he and his team have done ‘amazing’, ‘incredible’ work [while] critics think he has become increasingly dangerous.”

While Congress on Friday passed a $2tn stimulus to deal with the impact of coronavirus, the president has received withering criticism from many Democrats and some Republicans over the slow federal response, the inadequate level of testing and his push to ease social distancing guidelines to rescue the sinking economy.

New York Governor Andrew Cuomo speaks to the media while visiting the Jacob K. Javits Convention Center which will be partially converted into a hospital for patients affected by the coronavirus disease (COVID-19) in Manhattan in New York City, New York, U.S., March 23, 2020. REUTERS/Mike Segar
Andrew Cuomo speaks to the media while visiting the Javits Center, which will be converted into a hospital for patients affected by coronavirus, in Manhattan, on Monday © Mike Segar/Reuters

Mr Trump wants to halt the economic rout — in a move critics view as a brazen effort to help his re-election. But he has faced pushback even from some close allies, including Wyoming congresswoman Liz Cheney, who said: “There will be no normally functioning economy if our hospitals are overwhelmed and thousands of Americans of all ages, including our doctors and nurses, lay dying because we have failed to do what’s necessary to stop the virus.”

A recent poll conducted by Morning Consult found that 80 per cent of American adults thought it was important to continue social distancing even if that sustained the damage to the economy.

On Thursday, Mr Trump wrote to US governors to outline a plan that would see the administration categorise counties as low, medium or high-risk, in a strategy tailored to allow economic activity to return in some areas.

But Larry Hogan, the Republican governor of Maryland and chair of the bipartisan National Governors Association, told the Financial Times that Mr Trump had not mentioned the plan when he had spoken to the governors shortly before sending the letter. Moreover, Mr Hogan pours cold water on the plan, saying it was not realistic.

Trump on coronavirus

A president’s reactions as the crisis deepened

US President Donald Trump speaks during the daily briefing on the novel coronavirus, COVID-19, in the Brady Briefing Room at the White House on March 25, 2020, in Washington, DC. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
Donald Trump gives his daily briefing on coronavirus at the White House this week © Mandel Ngan/AFP

JAN 22

‘We have it totally under control. It’s one person coming in from China, and we have it under control’

FEB 27

‘It’s going to disappear. One day, it’s like a miracle, it will disappear’


‘Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of coronavirus, with 22 deaths. Think about that!’

MAR 16

When asked how he rated his response: ‘I’d rate it a 10. I think we’ve done a great job’

MAR 17

‘I’ve felt it was a pandemic long before it was called a pandemic’

“Since we’re not doing enough testing, I don’t know how you could possibly make a determination as to which counties are low risk or high risk or medium risk,” he says, adding that governors would have a “lot of concern”.

Mr Hogan applauds the White House for last week making the Federal Emergency Management Agency responsible for helping states procure masks and ventilators, some of which have been delivered. But he says it was just a “tiny percentage” of the needs. “We’re just so far behind and there doesn’t seem to be enough supply anywhere in the country to handle the surge that we’re expecting . . . in all the states.”

While New York has overtaken Washington as the hardest-hit state, cases have spread across the US with rising numbers reported from Florida to Texas. Scott Gottlieb, former head of the Food and Drug Administration, said 11 states had more cases than any Chinese province except Hubei, which includes Wuhan, where the virus originated.

“Our epidemic is likely to be national in scope,” Mr Gottlieb wrote.

In New York, 37,000 people have tested positive, with 5,000 in hospital and almost 400 deaths. Bodies are being stored in refrigerated lorries after the morgues became too full.

Bicyclists and a pedestrian pass through a quiet Manhattan street, Thursday, March 26, 2020, during the coronavirus pandemic in New York. Because of Gov. Andrew Cuomo's "stay-at-home" orders for all but essential workers, the streets are quieter than normal. (AP Photo/Mark Lennihan)
A quiet Manhattan Street on Thursday. Andrew Cuomo has issued stay-at-home orders for everyone apart from key workers © Mark Lennihan/AP

Hospitals also face big problems securing equipment to protect staff. On Thursday, Mount Sinai West, a Manhattan hospital, lost one of its nurses to coronavirus. Preparing for a worsening situation, Mr Cuomo has commandeered the Javits Center, an events venue, to become a makeshift hospital, while a military ship will provide another 1,000 beds. He is also requiring hospitals across the state to expand capacity by at least 50 per cent, in an effort to reach a target of 140,000 beds.

But those efforts are nowhere near enough, says Theodora Hatziioannou, a virologist at The Rockefeller University in New York, who estimates that 240,000 New Yorkers may need hospitalisation. “We should have been preparing.”

Mr Trump has angered critics by not using a Korean war-era law that would allow him to force companies to make badly needed equipment. “Ventilators, ventilators, ventilators”, Mr Cuomo said about his biggest need. The president on Friday urged General Motors in a tweet to open its “stupidly abandoned Lordstown plant” and make ventilators “fast”.

The president has received some credit for banning flights from China in January, and imposing travel restrictions on Europe.

Greg Martin, president-elect of the Society of Critical Care Medicine, praised the moves but said he should have procured equipment, such as masks. “We could have increased our stockpile of those things.”

Public health experts are also very concerned about Mr Trump’s push to reopen the economy in two weeks.

New York Army National Guard Soldiers of the 133rd Composite Supply Company with initial shipments of a FEMA Field Hospital set up at the Jacob Center in New York City
New York Army national guard soldiers with initial shipments at the Javits Center in New York City © Sean Madden/AFP

“That’s insane. Are you trying to kill the population?” says Ms Hatziioannou.

Mr Trump this week lashed out at suggestions that he was prioritising his re-election over the health of the public. “There are certain people that would like it to do financially poorly, because they think that would be very good as far as defeating me at the polls,” he said.

But fuelling fears that his focus was the politics, he skirted questions about whether his advisers agreed. Mr Fauci later followed in the footsteps of other advisers who have tried to neutralise his comments, by saying Easter was simply an “aspirational” date.

While Mr Trump is being slammed by experts, his opinion poll ratings have risen. According to Gallup, 49 per cent of voters approve of his performance, up 5 points from earlier this month. Sixty per cent approve of his response to the crisis, according to Gallup’s latest tracking poll earlier this week.

“His public approval rating is moving north while his professional reputation is moving south. One rarely sees such a split,” says Mr Gergen, adding that he may be helped by the “rally round the flag” effect that helped George W Bush after the 9/11 terror attacks.

On Thursday, Mr Trump said he wanted to act “pretty quickly” on opening the economy and might start with “large sections of our country that aren’t so seriously affected”, suggesting that he could ease social distancing guidelines for some cities and states next week

But while Mr Trump can ease national social distancing guidelines, the decision to order and reverse lockdowns lies almost entirely with governors, limiting his room to manoeuvre.

Mr Hogan says the US is “nowhere near the point where we can relax and let down our guard” and stressed that most of the governors would take their cues from experts, not the White House.

“You can’t put an artificial timeframe and say it’s all going to be better in two weeks,” says Mr Hogan. “We’re trying to make decisions that . . . save the lives of thousands of people.”

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Some rare coronavirus good news: equities are cheap




The writer is editor-in-chief of MoneyWeek

Everyone in the global financial market wants the same thing. They want to find a bit of data they can absolutely believe to be accurate and they want to use it to cut the risk levels embedded in their portfolio.

Too bad. They can’t have accuracy on anything and there are no low risk assets to buy. That everyone knows both these things explains the hysterical swings in indices this week. By Friday, nine trading days in March had made it on to analyst lists at Bianco Research as the biggest one-day gains and losses since the second world war. No other month comes close.

All is not lost, however. It is possible that we are near — or have even passed — the peak uncertainty bit of this crisis.

We know for example that Covid-19 cases probably peaked in China in early February, and now look to be peaking in Italy. We also know that China is recovering fast: according to Macquarie, coal consumption is at 95 per cent of the normal level for this time of year, traffic congestion is normalising and car sales are even rising again (slightly). The consensus appears to be that China is 85 per cent back to normal.

We also have a sense of just how bad things were at their worst in China: industrial profits fell by 38 per cent in February. So we have a rough — very rough — guide as to what might happen elsewhere, leaving aside second round infections. Think: a month of complete lockdown, followed by a few slightly easier months and, barring any new horrors, a return to a new kind of normal by early June.

We know one other important thing too: governments and central banks are prepared to blow more than the doors off our current monetary and fiscal systems to get their economies to the other side (30 per cent of the world’s population is in some form of lockdown).

They are prepared to blur the line completely between monetary and fiscal policy, with unlimited money creation and spending, to try and replace the parts of the economy they have shut down. The new package from the US comes in at nearly $2tn, which is a genuinely stunning 9.5 per cent of gross domestic product — or what GDP once was. Total global fiscal stimulus now comes to about 3 per cent of global GDP.

You might not like all of this. You might note that no amount of cash can make restaurant bookings rise from zero when the collapse in growth is due to physical restraint. And you might be terrified of the post-virus consequences of what amounts to helicopter money, as there will be no option but to monetise government debt from here on. But it does at least provide a clarity, of sorts.

Passing peak uncertainty is not the same at achieving certainty. But some forecasts are coming back into the market. US earnings are expected to fall by up to 60 per cent over the next couple of years, rather than rise this year by 10 per cent or so, as was expected in January. And the GDP of most economies is expected to fall by something like 35 per cent during the periods they are locked down: this, at least, is what Capital Economics suggests.

What about equity markets? We have some sense now of where we are going. We also know that markets tend to turn three months or so before economies do. So should we assume that this has been the fastest bull-to-bear-to-bull turn in history, where some of the worst short-term fundamentals ever have been overwhelmed by the greatest stimulus package in history?

In-out-and-in-again in just a month would be too brave a call. If this crash works like most crashes, there is every chance that we will test the lows again. Just ask any technical analyst! But there is definitely reason to start buying.

The first thing to note is that even after the bounces of this week, equities are no longer expensive. So-called Shiller price to earnings ratios, one of the better indicators of long-term value, show that equities, particularly outside the US, are at 20-year lows at least.

It’s also worth noting, as Pictet’s Luca Paolini points out, that while you might think you have just lived through one of the greatest bull markets ever, if on Wednesday you had looked at the last 10 years only, some 90 per cent of global markets were showing negative returns.

It’s also hard to see the alternative to stocks. The bond market is hardly a long-term safe haven. Cash isn’t either: in the short term, too many dominoes are falling in too many places to be sure of the financial system. In a world of limited crisis hitting unlimited stimulus, inflation is also a worry.

So buy for the long term, but buy carefully. There is a good argument that in a time of unbounded quantitative easing, it doesn’t matter what you buy. All equities, all assets even, will move in tandem. But why take the risk? In most bear markets everything goes down. But not everything comes up again.

So buy the things that probably will. Market leaders with little or no debt, experienced management, operating in sectors that offer some relief during lockdowns. And think about the Fangs: Facebook, Amazon, Netflix and Google. The giant tech stocks that led the US bull market for the last decade had become so stupidly expensive that many thought they would also trigger its end. Instead they are the companies providing the few services we now really need. You can’t put a price on that.

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