I woke up to a 1000-point rebound in the Dow futures, and we just gave up the whole thing.
The Dow just went negative, and the loss of excitement is understandable. After all, the big news of the session —that the president is on the cusp of announcing a major coronavirus relief plan — doesn't actually seem to be panning out.
The president told reporters in the White House briefing room last night that he would hold a news conference this afternoon to lay out the details, which would include relief for hourly workers who need paid sick leave, a possible payroll-tax cut, and loans for small businesses.
Sounds great! Hence the sharp rebound in markets overnight.
But this morning ... crickets. Then at 8:04 a.m., Eamon Javers reported that "the White House is far from ready" to make any such announcement; that some officials were "stunned" by the president's claim that a press conference on the matter was happening today; and that, in fact, no such event appears to be on the calendar.
And we've been gradually sliding back ever since.
Now, it may just be that — as Goldman's team pointed out over the weekend — fiscal stimulus packages typically take at least six months to enact. Most likely, the details just need to be worked out behind the scenes (indeed, House Democrats today said legislation needs to "be developed," and "would not be up for a vote this week").
But if it looks like the coronavirus relief package really won't be coming, watch out. As one observer noted on Twitter, "This is shaping up to be Tarp Vote redux." (For those who don't remember, the day the Troubled Asset Relief Program was first voted down by Congress during the '08-09 financial crisis was one of the Dow's worst days ever.)
According to Eamon, "A lot will depend on Mnuchin and Kudlow's lunch with Senate Republicans on the Hill today, where...they will float several ideas and see what is politically possible." All I know is, if we had gotten this ball rolling weeks ago we might have been able to avoid cutting rates to near-zero. At this rate, the Fed will probably cut to zero next week because they don't have the patience to wait it out.
Eamon will bring us the very latest at 1:15 p.m. today, along with Nick Timiraos of the Wall Street Journal. See you then.
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