Yesterday was a bad day. The Dow dropped 3,000 points, which accounted for the worst percentage drop since Black Monday in 1987. However, at the time of this writing, it looks as if U.S. stock futures are set to tick slightly higher today, which is a drop in the bucket, but we’ll take any positive we can get at this point. There could be some financial relief on the way, which is why speculators feel a little better about today. Treasury Secretary, Steve Mnuchin is expected to present an $850 million-dollar stimulus package to the senate that would provide relief to small businesses, airlines, and a potential payroll tax break. Hopefully it will give the economy the jolt id desperately needs.
Yesterday, President Trump admitted what seemed to be the inevitable, saying we may be headed towards a recession. This coronavirus outbreak has stunted not only the U.S. economy, but the world economy as well. The president also said that our current measures to combat this nasty virus could be in place until August. A scary thought.
Tom Lee, the Head of Research at Fundstradt Research said that many market observers have already priced in a recession. “Already, equity markets are down 30% from their highs and as we noted last week, this is pricing in >100% probability of a recession (based on price decline).” Hopefully we can pull out of this soon.