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

It was business as usual for PresidentDonald Trump on Monday as the stock market crumbled under the twin strains of collapsing oil prices and the spreading coronavirus.

The president spent his morning much like any other: flying around Florida to raise money for his re-election and blaming the “Fake News” and foreign powers for exacerbating his woes. He again minimized the coronavirus outbreak, saying the seasonal flu kills many more Americans and “life & the economy go on.”

Trump seemed newly determined not to allow the coronavirus fears that are tanking markets goad him into disrupting his day-to-day. In Orlando, he shook hands with a tightly packed group of supporters, a symbolic gesture that appeared intended to show that he wasn’t overly concerned about the contagion.

Meanwhile, markets cratered. 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.

Azar Comments

Trump’s Health and Human Services Secretary Alex Azar, who chairs the administration’s coronavirus task force, said Monday morning on Fox News that he hadn’t heard from the president yet that day. And White House Press Secretary Stephanie Grisham reinforced the idea that the coronavirus was having a minimal impact.

“While we have asked all Americans to exercise common-sense hygiene measures, we are conducting business as usual,” Grisham said in a statement.

The S&P 500 is now down about 17% from its Feb. 19 all-time high, threatening to end the record-long bull market that began 11 years ago to the day. New York Stock Exchange circuit breakers halted trading for 15 minutes at 9:34 a.m. in New York, in a move designed to limit panic.

Still, the S&P 500 and Dow remain up roughly 30% since Trump was elected in 2016.

TV Shows Sell-Off

Fox News’s coverage of the sell-off was playing aboard Air Force One as Trump taxied at the Orlando airport, where he was about to greet supporters and hold a fundraiser.

But any new steps to shore up the economy appeared unlikely to come before markets close Monday. The White House set a meeting with Trump and his economic team to discuss possible actions after he returns to Washington late in the afternoon.

Monday’s display came after the president spent his weekend golfing with members of the Washington Nationals baseball team at his West Palm Beach golf club and entertaining Republican donors at his Mar-A-Lago resort. On cable television shows, Trump’s top economic advisers have downplayed the need for sweeping economic stimulus, saying they were only considering minor, targeted assistance for those impacted by the coronavirus.

For a president acutely aware of the rhetorical power his office holds — and a leader who fueled his political rise by accusing Obama of having an air of detachment during moments of crisis — the effort appeared a deliberate, and curious, bid to project calm.

Crude tumbled Monday the most since the Gulf War in 1991, after an OPEC+ alliance that had contained global production disintegrated. The oil-price crash, if sustained, would upend politics and budgets around the world, exacerbate strains in high-yield credit and add pressure on central bankers trying to avert a recession. It typically would have proved a boon to consumers, but the coronavirus is increasingly keeping them at home.

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.”

Azar told reporters that Trump and his economic team had the tools to keep the economy going strong.

“The fundamentals remain what they are,” Azar said.

— With assistance by Chris Nagi, and Jennifer Jacobs

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