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Trump continues to speak during market hours; stocks continue to tank

 


WASHINGTON When President Donald Trump speaks, the financial markets spin and shake in real time.

But that didn’t stop the president from speaking almost daily about the coronavirus pandemic and its economic implications without waiting for the markets to close for the day.

While many of his predecessors have consciously worked not to affect the markets, Trump has openly made market movements and performance a measure of his efficiency and central to his argument for a second term.

Earlier this week, public health officials announced an upsurge in infections in the United States, as leading economists predicted unemployment would reach 10% or more. Trump, meanwhile, took the White House podium in the middle of the day to offer an optimistic view of his administration’s response to the crisis.

“One of the things we are working on a lot on the Hill is to keep jobs so that when we get rid of the virus, we can really really … go like a rocket,” Trump said Thursday as the market had reached more than 300 points, then plunged into negative territory then retreated into positive territory during its 77-minute press conference. “I think the economy is going to be fantastic.”

Friday, the president went again to the same place while the markets were open for an even longer press conference, where he oscillated between expressing his optimism and denouncing the negativity of “nasty” journalists.

Amidst more difficult news, the number of confirmed infections worldwide has exceeded 250,000 cases. The Dow Jones industrial average closed more than 4.5% on Friday.

At the end of the heaviest market losses in more than 30 years, the market closed at 19,173.98, below its level the day before Trump’s inauguration and erased the so-called “Trump bump.” “which he pointed out throughout his presidency as proof of his prowess as an economic steward.

Nonetheless, in the midst of one of the most volatile moments in the U.S. economy, Trump bet his voice was the daily balm necessary to allay investor concerns.

During the past eight days – during which he held long press conferences on the response of the coronavirus in the midst of exchanges – his comments did not stop the bleeding. The Dow Jones has lost more than 17% since March 13 and has fallen more than 34% since the market hit a historic high on February 19.

The President’s decision to offer daily affirmations to the health of the stock market and the economy as a whole is not surprising. But no president has tied his fortune to Wall Street more closely than Trump, who, until the market collapsed, boasted that the rise in the stock market was proof of his success in running the economy.

“Maybe he should take it offline,” said Mark Zandi, chief economist at Moody Analytics. “But this president? He’s not going to do this.”

Jimmy Carter, George H.W. Bush and George W. Bush have avoided talking about the stock market in substance, let alone trying to impact the market in the midst of trading. Bill Clinton has taken the advice of his economic advisor, Robert Rubin, to heart, that markets go up and down.

Barack Obama was ridiculed as a stock picker in office for less than two months when he hinted, amid a market downturn, that it was the right time to buy dumped stocks.

For much of his next six years in office, the 44th President was often measured when he even spoke of improving the health of the economy: his first term began in the throes of the Great Recession, but he left office with 75 consecutive months of job growth. At the end of his presidency, Obama began to demand credit for the bull market on occasion.

“The stock market is booming,” Obama said in a July 2014 speech in Kansas City.

Relatives of Trump said he was fully aware that the coronavirus posed a huge threat to the same booming markets he had touted as his presidential business card, even if he publicly downplayed concerns about the virus.

In the weeks when the pandemic exploded in a public health emergency, Trump had become increasingly frustrated by privately voicing his concerns to his advisers about the effect the virus could have on the markets and, ultimately, its re-election effort, according to White House officials and Republicans. to the west wing.

Trump, throughout his presidency, viewed market performance as his “daily newsletter” of his professional performance, said Zandi. With the pandemic pushing the economy into a recession, Zandi said Trump now appears to be looking to the market for an “hourly bulletin” to gauge the effectiveness of his response.

“In the past it has sometimes worked and sometimes it has not,” said Zandi of the president’s cheerleading market for years. “Recently, he hasn’t. He has, in fact, recently done less to inspire confidence and more to upset investors. They do not see his actions as very productive in the face of this crisis. It worked against him. “

Throughout his presidency, Trump has used direct diatribes to try to shame large publicly traded companies whose trade relations are at odds with his political interests, exploited timely friendly tweets on Chinese Xi Jinping to calm down market concerns about trade wars, and repeatedly chastised Federal Reserve chairman Jerome Powell about central bank policies during market downturns.

Trump has made it abundantly clear on several occasions that the battered market is at the center of his concerns, as billions of dollars in wealth and almost all of Dow Jones Industrial’s earnings have been wiped out since its inception. He sought to come back with his daily updates on his administration’s efforts to contain the virus in the middle of the trading day, said Zandi.

It generally did not work.

Trump held a press conference at Rose Garden on March 13, just before the New York Stock Exchange closed for the weekend, to declare a national emergency, to announce increased availability of virus testing kits were in preparation and to declare that he was ordering the purchase of oil for the strategic oil reserve.

Later this weekend, he boasted at another press conference that the market had responded to his performance with his biggest gain in a day. The President did not say the fact that the market had had its worst day since Black Monday in 1987, the day before the record.

“I think we should do one every day, maybe. How about five times a day?” Trump pointed out. “We will do it five times a day. But it was something to watch out for and I had no idea.”

The huge gains on Friday that Trump boasted of came from his whispers in the market, followed by an erasure on Monday that saw a historic drop of nearly 3,000 points for the Dow Jones.

Investors abandoned their stocks after the Fed’s surprise decision on Sunday evening to cut interest rates to near zero, a move that only exacerbated investor concerns over a global recession. The Fed’s rate cut came the day after Trump again publicly criticized Powell for his interest rates.

Jason Furman, an economist at Harvard University who was Obama’s chief economic adviser, said that Trump should provide important updates on coronaviruses whenever he and his team see fit. But Furman also advised Trump to “let the stock market take care of itself.”

Diane Swonk, chief economist at Grant Thornton, said that “genius is out of the bottle” with Trump’s constant attempts to shape the market via Twitter and the media. And with the global nature of the market, when Trump makes his comments remains less important than the substance of his remarks, she said.

“This is where the facts count, the information and the highly targeted communications,” said Swonk. “His experts should be at the center of his concerns. His job should be to be the guardian right now. Often, the alpha dog is not the first in the pack.”

Associated Press author Zeke Miller contributed to this article.

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