Market Watch: Slight Gains as White House Releases Plan to Reopen Economy
On Thursday afternoon, President Trump released a gradual plan to reopen the economy after a near-total shut down due to the coronavirus. However, with overwhelming dreadful economic data beginning to compile, Wall Street did not have its best week. Thursday morning market averages turned sharply lower and had a gradual rally by the end of the day due to a few key tech stocks showing an upward trend. The Dow Jones Industrial Average closed up .7%, S&P 500 increased .6%, and NASDAQ up 1.7%.
Amid devastating economic reports and a fluctuating market, governors will begin to work together to gradually reopen the U.S. economy.
The 3-phase guidelines for reopening the U.S. economy on Thursday can be found here.
Despite a few tech gains, reports showing the COVID-19 damage leaves the country in a place of uncertainty. Oil prices tank investor confidence as it dropped to below $20 per barrel, and the International Energy Agency predicted record-breaking losses in the petroleum industry in 2020, plunging investor confidence as oil prices fell below $20 per barrel. The U.S. Department of Labor reported that last week's jobless claims came close to over 22 million jobs lost due to COVED-19, wiping out all job gains since the Great Recession. Also, bank earnings continue to pressure markets; Bank of America reported a quarterly decline of over 45% in profits before the past two weeks of further damage.
Health care professionals and politicians began to release plans on the safest way to reopen the country. President Trump met with the governors over a video call to discuss his plan that will be divided into three phases. The video call informed governors that the plan is not a formal order from the federal government, and each state can move through the guidelines according to their discretion.
Phase one calls for vulnerable individuals to shelter in place and all individuals to maintain social distancing rules. This will also include the phased return to work and remain working at home if possible. States are encouraged to minimize nonessential travel and make accommodations for those who are compromised. The initiation of this phase requires states to have a downward trajectory of positive cases, the ability for instate hospitals to treat all patients without crisis care, and the plan directed states to have "a robust testing program in place for at-risk healthcare workers, including emerging antibody testing."
Phase two allows nonessential business travel to resume. Bars, gyms, schools, and venues can reopen with social distancing measures in place. Phase three extends period two, adding limited social distancing rules and proper sanitation available for any public setting.
The plan primarily focuses on getting uncompromised individuals back to work as soon as possible, using a states' testing scope along with the healthcare capacity within each country. Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci said that all states will have to meet a certain gate determined by governors to enter phase one, and warned that setbacks might be prevalent along the way.
The country has been waiting on answers as to if the coronavirus will ever reside and what will happen next. The decision to reopen the economy comes with significant risk and uncertainty. It is with great hope that the plans in place will slowly halt the economic crisis without risking American lives.
"We have large sections of the country that can think about re-opening," President Trump said at Thursday evening’s White House briefing. "We are opening up our great country again....it's going to be over a period of time.”