Hope sparked a rally.
But it’s not time to buy just yet.
Granted, President Trump did say he would meet with Congress in a bid to pass a temporary payroll tax cut and fund sick leave for temporary employees. “We’re going to be talking about hourly wage earners getting help so that they can be in a position where they’re not going to ever miss a paycheck,” Trump said, as quoted by the New York Post. “This was something that we were thrown into and we’re going to handle it and we have been handling it very well.”
However, according to some inside the Trump Administration, “That was news to everyone on the inside,” with details up in the air. “It’s not there right now,” an official said. “A lot of details need to be worked out.”
Hopefully, something will happen, though.
President Trump also noted the Administration would work with travel companies, such as airlines and cruise lines, as travel restrictions take a big toll. American Airlines for example just cut international and domestic flights, as demand breaks down. Reportedly, wage relief is also on the table, but would require “big federal spending,” as noted by CNBC.
An Oil Price War is Wreaking Havoc
Oil is up slightly this morning, but tensions are still high between Russia and the Saudis.
In fact, Saudi Arabia just escalated its oil price war with Russia, with its state-owned company saying it’ll supply a record 12.3 million barrels a day next month. That increase would be more than a 25% month over month increase, and would flood the market.
In response, Russia’s energy minister said the country has the ability to boost production by another 500,000 barrels. That could boost Russia’s output to 11.8 million barrels a day.
Analysts Still See Bumps Ahead
“The COVID-19 outbreak is a serious real-time exogenous threat, and our view might change as developments unfold. For now, though, we believe that the fundamentals of the U.S. economy are supportive of a cyclically bullish stance. However, caution is still warranted in the near term. It is too early to bottom fish in equities,” say analysts at BCA Research, as quoted by MarketWatch.
So, no it may not be time to buy the dip just yet.
