Careful What You Wish For
U.S. President Donald Trump has made the stock market a benchmark of his presidency, tweeting or speaking about the stock market too many times to list. President Trump even boasted a few months ago saying, "STOCK MARKET AT ALL-TIME HIGH! HOW ARE YOUR 401K’S DOING? 70%, 80%, 90% up? Only 50% up! What are you doing wrong?"
What he has also tweeted or said almost as often, is his wishes for the U.S. Federal Reserve to cut interest rates and undertake quantitative easing, or QE. President Trump even infamously called Fed officials "boneheads" for their reluctance to give in to his demands.
As a result of the coronavirus outbreak, President Trump got everything he's asked for. The Fed cut the fed funds rate to essentially zero and announced a massive QE program to help strengthen the economy.
Despite the Fed doing everything President Trump had wished for, it's not all good news. The Dow Jones Industrial Average officially wiped out all of its gains since President Trump won the 2016 presidential election. Yesterday, the Dow sunk below its closing price of 18,332.74 on November 16, 2016, the day Trump defeated Hillary Clinton. The Dow is now down nearly 40% from its all-time high of just under 30,000 from just over a month ago.
All it took for his wishes to be fulfilled was the fastest drop from all-time highs to a bear market in history. However, the pain hasn't stopped at the 20% decline that marks a bear market. The S&P 500 logged its fastest 30% drop ever, in just 22 trading days. To put into context how swift the recent decline has been, the previous three-fastest 30% drops in S&P 500 history all came during the Great Depression.
With less than nine months until the election and the coronavirus ripping apart the economy and stock market, President Trump is quickly losing the ability to campaign on one of the focal points of his presidency.
CVS joins the race to hire. CVS is following in the footsteps of companies such as Walmart and Amazon by rushing to hire additional employees. CVS announced it is looking to immediately fill 50,000 jobs to keep up with demand. CVS described the move as "the most ambitious hiring drive in the company’s history." CVS also announced it will issue bonuses between $150 and $500 to various levels of employees who have continued to work in the company's stores.
Peeps are "life-sustaining." Pennsylvania Governor Tom Wolf said the popular candy Peeps are "life-sustaining" and the company that manufactures them, Just Born, can therefore continue production amidst businesses being forced to close. "Regardless of what the nutritional facts are on the side of a box of PEEPS, the marshmallow treat's producers in Bethlehem believe that it's an emotionally healthy necessity and therefore, an essential business," Wolf said.
NYC has a rent problem. According to real estate website PropertyNest, 38.9% of New Yorkers don't have enough money to pay rent if they lose their jobs or have their pay suspended. The study found those most affected would be women and young adults aged 18-24. "The data shows a clear gap between the haves and have nots," said PropertyNest founder Ruth Shin. "More than one-third of all New York City residents won’t be able to pay rent, and this will rise to more than half of all residents if we are in this situation for months to come."
CalPERS takes a hit. The California Public Employees' Retirement System (CalPERS) has taken a $69 billion hit as a result of the recent market selloff. CalPERS, which oversees pension investments for hundreds of thousands of California public employees, saw its assets shrink to $335 billion from $404 billion a month ago. "It’s not that we didn’t expect it, although it does seem a little unprecedented in the market," said CalPERS CEO Marcie Frost. "We were planning for a market downturn or correction in the market for the last couple years."
Uber CEO pleads for help. Uber CEO Dara Khosrowshahi is asking U.S. President Donald Trump to provide financial assistance to gig workers who have been affected by the coronavirus. "I respectfully and urgently request that the economic stimulus you are considering, along with any other future legislative measures in response to COVID-19, include protections and benefits for independent workers, not just employees," Khosrowshahi wrote in a letter to President Trump.