The markets were positive for a couple reasons.
First, the Fed made it clear that they would do whatever it will take to keep markets liquid. This is different that other times when they did the “Ready, Fire, Aim”. They acted in a less panicked manner.
I was shocked to see President Trump have a press conference and address the medical as well as financial aspect of the administration's handling of the situation. In previous press conferences, President Trump talked about the stock market, the Fed lowering interest rates, etc.
Yesterday, I pointed out to my Practical Option Tactics (POT) students that much of the volatility in the stock market is fear-based panic. We are getting conflicting news with political biases. Some news agencies are even making crap up. Regardless of the validity of the news, the President has done everything he could with regard to the virus, with one exception. He has not calmed people down.
It is nice to know the overnight repo markets are not going to collapse on the intra-banking system. It is nice to know the Fed is flooding the system with money supply. It is nice to know that the yield curve is acting well. FOR YOU AND ME this is good news. 99% of the population doesn't know what the Fed Funds rate is and doesn't care. They want to know a couple things.
- How bad is the virus?
- Will the hospitals be overwhelmed and turn me away when I am sick like the media is saying?
- What is the President doing to get more hospitals up and running?
- Joe Average doesn't want the National Guard there protecting them, they want the National Guard bringing medical supplies. We saw them protect us at the race riots in Chicago and Ohio.
Joe Average was not working in a bar last year, then elected to Congress and made an instant expert on viruses, economics, healthcare, foreign policy, budgets, the environment and the Supreme Court. You need that red lapel pin for that kind of magic. Joe Average is still working.
I mentioned that President Trump needed to address this, and do it MANY TIMES. People are afraid and need to hear daily that things are being done, and specifically what is being done. I even mentioned that they should create more overnight hospitals like MASH units. Below is what I wrote.