“By criticizing Europe and not announcing stricter domestic travel measures in the U.S., President Trump is treating Covid-19 as a European and Asian problem. Clearly, the market doesn’t like this.” Announcing stricter containment efforts in the U.S. could have cushioned the sell-off, he said.
“Now the ‘no endgame in sight’ risk-off trade takes over as traders are hammering the sell button now thinking the U.S. government has fallen well behind the curve in its Covid-19 response.”
Lightweight Measures
Chris Weston, head of research at Pepperstone Group in Melbourne:
“Trump’s measures are so lightweight compared to what we’ve seen in countries like the U.K. -- we need Trump to be a general here, and markets needed to see something bi-partisan.”
“They want measures that will go through Congress and get done within days, not after the November election. Investors will not hesitate to show what they think to the Federal Reserve and governments over the next few sessions.”
Rolling Their Eyes
Robert Carnell, chief economist for Asia Pacific at ING Groep NV in Singapore:
“Trump’s hands are tied, he can’t come up with any meaningful spending on the virus without Congressional support, and that is difficult to achieve with the current political backdrop.”
“The deferment of tax payments does help the cash flow for firms, and isn’t meaningless, but I think markets will be looking at the claim that this is ‘This is the most aggressive and comprehensive effort to confront a foreign virus in modern history,’ and rolling their eyes.”
“The travel ban for Europe will have economic consequences, both in Europe and the U.S., and it may help to lower the eventual peak of the virus in the U.S. That is a highly debatable premise though without the widespread testing for the virus in the U.S.”
Negative Growth
Mark Matthews, head of Asia research of Swiss wealth firm Bank Julius Baer & Co. in Singapore: