The Dow jumped 400 points Wednesday morning as President Trump accused the media of inflating the seriousness of the coronavirus outbreak. Trump is “furious” about the market’s losses this week and has discouraged his staff from making any forecasts that might cause further damage, according to a report from the Washington Post, citing two people familiar with his thinking.
- Trump has long considered the stock market’s recent highs to be evidence of his success, and this week’s major rout comes amid criticism that his administration has downplayed the potential economic impact of the coronavirus outbreak.
- He played defense on Twitter during Tuesday night’s Democratic debate, writing, “CDC and my Administration are doing a GREAT job of handling Coronavirus, including the very early closing of our borders to certain areas of the world. It was opposed by the Dems, “too soon”, but turned out to be the correct decision.”
- Trump weighed in again on Wednesday morning, accusing the media of “doing everything possible to make the Caronavirus [sic] look as bad as possible, including panicking markets . . . ”
- National Economic Council director Larry Kudlow told CNBC on Tuesday that the virus is contained in the United States and is unlikely to become an economic crisis; he also encouraged investors to consider this week’s sell-off to be a buying opportunity.
- That same afternoon, a CDC official warned that the American public should brace for major disruptions, saying that the spread of the disease in the United States is “not so much a question of if this will happen anymore, but rather more of a question of exactly when this will happen."
Big number: The Dow lost nearly 1,900 points, or 3.1%, on Monday and Tuesday alone and the S&P 500 fell 7% from last week’s record high as investor fears over the global health crisis finally came to light in the market.
Crucial quote: “You don’t want to overly feed the darkness, but if you seem like all you do is happy talk, then you lose credibility,” Gene Sperling, a former economic advisor to President Clinton and President Obama, told the Washington Post. “You get a three-hour high from your happy talk, but lose the long-term ability to be seen as serious, factual and potentially reassuring at a later point when it might be justified. This White House may already be in danger of losing the capacity to be seen as serious.”
Key background: More than 80,000 people worldwide have been infected with the coronavirus, which is now spreading beyond China into other major economies like Italy and South Korea. Switzerland, Croatia and Austria have also seen new cases of the virus. European stocks suffered on Wednesday morning, with the Stoxx 600 losing 2%, as Germany’s Dax 30, France’s CAC 40 and London’s FTSE 100 also fell.
This article originally appeared on Forbes.
