Markets Conclude – For Now – The Future is Assured

The stock markets went up, up and up Monday and President Trump said he had a “warm” conversation with Joe Biden. True or False?

Somehow part of the world slipped into a parallel and intensely positive universe Monday, particularly surprising at the beginning of what every expert and the president says is going to be a historically horrible week for America. Deaths by the hundreds, an economy wound down to below idle and uncertainty and dread coast to coast are not the usual ingredients of a big market rally. Granted a nearly 8% increase in the Dow industrials is not nearly as impressive as it used to be. The 1,628 point increase, supercharged with heavy buying toward the end of trading was, after all, only the biggest gain in two weeks. The broader S&P 500 rose almost as much, 7.1%, and the Nasdaq ended the day’s trading ahead by 7.3%.

The early Wednesday Asia markets grabbed the baton and were posting a 2.4% surge for the Nikkei, on a day when Japan’s Prime Minister Abe was said to be close to declaring a medical emergency in several prefectures, again, counterintuitive. The Dow and S&P futures were about flat, certainly to be expected after Monday’s somewhat spectacular run.

“Things are going really well,” President Trump said. That was several hours after the markets closed. Not a factor.

What made the difference was New York governor Andrew Cuomo’s daily report, saying that the last two day’s death tolls were “essentially flat”. Coupled with some levelling in Italy and Spain the message was clear, at least to the markets. Time to rejoice. Or maybe, time to rejoice?

Cuomo had also said that the couple of days in which the numbers have been slightly less bad was no proof the apex has been reached or even that a plateau had been established. New York hospitals are using their full capacity, he said, at the brink of being overstretched. Personnel can’t work any harder.

The models differ. There is a grinding plateau kind of model, in which the death toll levels out but stays there, fed by new infections. Another kind of model sees a subsequent bump up like that being seen in Singapore. Nevertheless, it was all sufficient good news for investors and traders.

The Task Force’s two medical experts acknowledged in the night time briefing there is an early sign that keeping almost the entire population at home is working, perhaps better than they had hoped. The NIH’s Tony Fauci said he hopes that the wide compliance with the guidelines for physical separation may indeed keep the ultimate death toll below the best-case scenario projection of 100,000 fatalities. Deborah Birx, the other infectious disease specialist, said if there has been progress, it’s because most people are cooperating.

She doubled down on her Saturday advice it’s more important than ever not to leave the house, not to go even to the grocery store. Monday she said maybe every two weeks.

Now at the other corner of the day’s parallel universe, Trump actually did say he had a friendly, warm conversation with Joe Biden. After tweeting in the morning the question, ‘where was that Biden telephone call?’, it happened.

“We had a really wonderful, warm conversation,” Trump said Monday night. “It was a very nice conversation.”

He said he “appreciated” the call in which the two likely political opponents talked about the virus, and Trump’s jaw was not even clenched. Yes, that did happen.

Trump also praised some governors he had only yesterday and in the days before criticised. He started out with a tone of friendliness toward the reporters in the room. He wished the best for UK Prime Minister Boris Johnson, now in the intensive care ward with the coronavirus he had earlier dismissed as a serious threat.

Trump said he had asked two private specialists to go to London to assist with Johnson’s recovery in some unspecified way. There were no follow up questions on the subject about whether they were carrying doses of the president’s favourite therapeutic candidate, hydroxychloroquine.

For a moment or two, there seemed to be a feeling in the White House briefing room that some tide had turned since an angry Trump had attacked a couple more reporters Sunday night, attacked the Illinois governor and cut off a reporter’s question to Dr Fauci that might have evoked some scepticism about the president’s hope for hydroxychloroquine.

Actually, the magic did disappear after about 20 minutes when the tone deteriorated into the usual contentiousness. The day’s special feature was not the usual attacks on reporters, but the president’s sharp questions about the identity of an inspector general who reported complaints of scarce medical supplies from 300 hospitals. His Public Health Service admiral, Brett Girior, had a perfectly reasonable explanation for the hospital complaints. They came before the supply distribution system was fully operational.

For the president, the IG report had to be political, from an Obama administration holdover and he repeatedly asked for her name. She was reappointed by the Trump administration in January and has been doing the job for 20 years.

Last week the president fired another inspector general who had crossed him, the one who brought to Congress the whistleblower’s account of his telephone call with the Ukrainian prime minister that led to his impeachment. So, when he repeated the reporter’s words, “inspector general”, it was delivered with an audible sneer.

Whether she faces some kind of retaliation will remain to be seen. No-one would be surprised to hear, “You’re fired.” Just like no one is surprised to hear a reporter or two every night told, as happened Monday night, it is “so horrid in the way you ask a question”.

Some reporters held their breath when in one answer, the Task Force’s Birx uttered words not usually permissible from any dais occupied by the president, that testing and containment had a “little late start”, meaning mitigation was the only possible strategy. Trump didn’t react and the briefing continued.

Trump, during the mellow part of the briefing, said he did have a less vindictive impulse, and intends to step into the controversy about that navy commander relieved of his duties running the nuclear aircraft carrier USS Roosevelt. He implied he might do something on his behalf after all. He said he maybe doesn’t want to “destroy someone who had a bad day”.

The backstory was that his politically appointed secretary of the navy had gone a little too far in playing the villain in this morality tale, calling the commander either “naïve” or “stupid” in an intemperate address to his sailors. They thought their former commander was a hero – as does a sizable proportion of the general public – for helping get them off the virus-infested carrier.

Sunday’s night chronicle dealt with the spat between the widely revered Fauci and the president’s supply line coordinator Peter Navarro over, what else, hydroxychloroquine. There’s an update. The New York Times reports Monday night that Navarro warned in a memo circulated in the White House on January 29 of the risk of a pandemic that could cause hundreds of thousands of deaths and cost the economy trillions.

Back to the week’s primary reality, the coronavirus. Total US virus deaths, 10,871. Twenty-four hours earlier it had been less than 10,000. The accelerating rate of increase is what is haunting this week and next.


Colin Lambert

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