According to CNBC, last week the US equities markets wiped out $3.18 trillion dollars from the balance sheet as investors and traders panicked to get out of stocks amid coronavirus pandemonium.
The coronavirus has caused market sell-offs in global markets, however Dow and S&P Futures have indicated that lady fortune is very fickle, as the Dow and S&P has been violently swinging pre-market. Earlier in the morning, it looked like lady fortune was in the favor of stopping the bleeding on global markets as the Whitehouse is considering broad stimulus to ensure stability returns to the markets and level out after last weeks bloodbath.
The FED is not enough – Real government intervention is imminent
Central banks around the world are stepping in and propping up global markets, but the real buffer could come from worlds leaders stepping in.
Quantitative easing or other fiscal policy at the FED level simply will not be enough to sway the markets, and during an election year you can reset assured that Trump will pull out all the stops.
The US 2020 election could prove to be the real savior of the markets.
Let’s face it we are in the midst of a Presidential election year and President Trump has attached himself to the US economy as its sole champion and savior.
After so publicly hitching himself to the success of the American economy the first 3 years of his presidency, watching it go from about 19,700.00 to almost 30,000.00 in his first 3 years in office, the wheels would come off the bus if the markets tanked before the voters cast their ballots in November.
Polls from Moody’s have show that Trump would “steamroll the competition” in November if the economy fares well between now and then. Voters have shown they have confidence in Trumps ability to handle the economy. However anything less than continued economic success puts Mr. Trumps re-election dreams at risk.
Timing is super crucial for President Trump over how the economy holds up between now and November. Trump has repeatedly touted the economy as his biggest selling point for his voters to continue to support him.
From 19,732.40 to to 29,568.00
During Trump’s tenure he has overseen the Dow go from a modest 19,732.40 to a whopping 29,568.00 in just 3 years. That translates to 66.74% in approximately 1,100 days.
Voters are fickle, and Trump is well aware of this. After attaching himself to the economy the way that he has, it is very unlikely he gets re-elected unless the economy continues the status quo.
Dow futures Swing violently this morning
At one point the Dow was up 600 points and 15 before the open it is down over 300 points.
It seems the stimulus that the Fed is promising falls short of what the market needs at this point. Global markets such as Tokyo to London are up, however the Dow, S&P and NASDAQ struggle to hold their ground.