Trump and Pence reportedly talked with a handful of Wall Street giants to get their view on how coronavirus is reshaping markets and the economy
The White House spoke with Wall Street giants including Stephen Schwarzman and Paul Tudor Jones on Tuesday about how they view the coronavirus-battered economy and struggling financial markets, CNBC reported. President Trump and Vice President Pence avoided talking about potential relief measures and instead asked the investors how they see the economy recovering from the pandemic's fallout. Individuals on the call said the economy can't be allowed to crumble, and that a specific deadline for resuming regular activity might be in order, sources told CNBC. In a Fox News town hall after the call, Trump said he'd like to see the economy "raring to go by Easter," defying advice given by top public health experts. Visit the Business Insider homepage for more stories.
President Donald Trump and Vice President Mike Pence spoke with some of Wall Street's biggest names to get their perspective on how the coronavirus is hitting the US economy and financial markets, CNBC reported Tuesday afternoon. The White House's call included Blackstone's Stephen Schwarzman, Just Capital's Paul Tudor Jones, Intercontinental Exchange's Jeffrey Sprecher, Vista Equity's Robert Smith, and Third Point's Dan Loeb, according to CNBC. Potential measures to combat the virus weren't addressed, with the "productive" call instead focused on how the investors view the current situation, sources told CNBC. Individuals on the call highlighted the idea that the economy can't be allowed to spin out, and that a specific date for resuming regular activity may be necessary. The conversation also addressed the Federal Reserve's easing measures and what else the central bank could do to protect companies against the coronavirus's damage. Read more: JPMorgan reveals the 6 issues that will shape the endgame scenario for coronavirus as it derails the financial system — and shares what investors should be prepared for The conversation took place before Trump joined Fox News for a town hall and said he'd like the economy to be "raring to go by Easter." The deadline arrives far earlier than what many epidemiologists suggest and risks allowing the virus to spread more rampantly throughout the US. The coronavirus has so far driven historically sharp declines to several key US industries. IHS Markit's composite purchasing managers index tanked to 40.5 in March from 49.6, according to a Tuesday release, marking an all-time low for the metric and its biggest drop since the financial crisis. The March data is "roughly indicative" of a 5% GDP drop, but further actions taken to contain the virus will drive "a far steeper rate of decline" in the second quarter, Chris Williamson, IHS Markit's chief business economist, said in a statement. Major banks project the US will enter a recession in the first half of the year, with a select few saying the nation is already mired in economic contraction. Read more: Jefferies pinpointed 7 beaten-down, cash-rich stocks to buy right now in a coronavirus-stricken market — and shared 2 'at-risk' stocks to avoid completely As the Fed has propped up money markets through capital injections, asset purchases, and loan facilities, Congress has struggled to pass a nearly $2 trillion stimulus package. Senate Democrats blocked legislation on Sunday and Monday while calling for stronger worker protections and greater scrutiny around how the White House may issue corporate relief loans. Markets erased Monday's losses in Tuesday's session as investors hoped for the Senate to approve wide-ranging fiscal relief. Now read more markets coverage from Markets Insider and Business Insider: The Fed's cannonball into bond markets drove $1 billion into the world's biggest credit ETF in a single day Jeff Bezos, Larry Fink, and other top US execs dodged $1.9 billion in losses by selling their own stock as the coronavirus outbreak worsened Jefferies pinpointed 7 beaten-down, cash-rich stocks to buy right now in a coronavirus-stricken market — and shared 2 'at-risk' stocks to avoid completelyJoin the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
More like this (3)
A 2nd wave of coronavirus won't stop the stock market's momentum upward, Wharton Professor Jeremy Siegel says
Wharton professor of finance Jeremey Siegel told CNBC that the stock market would not lose upward...Wharton professor of finance Jeremey Siegel told CNBC that the stock market would not lose upward momentum if the US were to experience a second wave of COVID-19. Siegel said that because stocks are so forward looking, a short-term lapse in the economy will not stop long-term moves higher. The professor also said he believes both tech stocks and cyclical stocks will go higher in 2021 as the US begins to fully re-open. Visit Business Insider's homepage for more stories. Professor Jeremy Siegel told CNBC on Tuesday that it's unlikely a second wave of the coronavirus would derail the stock market's march upward. "We're not anywhere getting near down those March lows. A little pause if we get that wave, but I don't think it's going to really stop the longer-term momentum," the Wharton School of Business professor of finance said. The S&P 500 has rallied more than 55% since its March 23 low. It traded 0.07% higher on Tuesday. Siegel stressed that the forward-looking nature of stocks and the continued liquidity provided by the Fed will be a "really powerful force" for the market's drive upward. The professor said that even if an effective coronavirus vaccine takes another six months or more, stocks will still move upward in a V-shaped recovery. Read more: BlackRock unpacks the 4 biggest changes it has made to portfolios since the crisis began 6 months ago — and shares how it's positioning to thrive in a post-COVID world "That's why you could have a U-economy, a W-economy, and you can still have a V-stock market. Because of that forward looking component," the professor said. According to Siegel, 90% of the value of a stock depends on its earnings more than 12 months in the future. He also discussed the popular debate about whether investors should buy more tech stocks or pivot into cyclical stocks as the US begins to recover. "I think there's room for both groups to go up in 2021," Siegel said. Siegel said he believes that even if cyclical stocks outperform the market next year, it doesn't mean that tech stocks have to go down. The coronavirus pandemic has demonstrated to the economy how important tech is, and Siegel does not think that's going to go away. Read more: US investing champion David Ryan famously garnered a compounded return of 1,379% in just 3 years. Here is the 11-part criteria he uses to find the next big winner.Join the conversation about this story » NOW WATCH: Why YETI coolers are so expensive
Wall Street giants including the CEOs of Goldman and Blackstone are pouring money into the campaign to defeat AOC in a June primary
Some of Wall Street's most prominent names have donated thousands of dollars to Alexandra Ocasio-Cortez's opponent...Some of Wall Street's most prominent names have donated thousands of dollars to Alexandra Ocasio-Cortez's opponent in the upcoming Democratic primary in New York, data from the FEC shows. As first reported by the Financial Times, names including Goldman Sachs CEO David Solomon, and Blackstone CEO Steve Schwarzman have given to Michelle Caruso-Cabrera. Caruso-Cabrera, a former CNBC journalist, takes Ocasio-Cortez on in a primary in New York's 14th congressional district on 23 June. While she has the backing of Wall Street behemoths, Caruso-Cabrera trails AOC significantly in the fundraising stakes, raising just over $2 million, compared to Ocasio-Cortez's $10.5 million. Visit Business Insider's homepage for more stories. Some of Wall Street's most prominent names have donated thousands of dollars to Alexandra Ocasio-Cortez's opponent in the upcoming Democratic primary in New York, data from the FEC shows. Federal Election Commission datashows that donors including Goldman Sachs' CEO David Solomon, Blackstone's Stephen Schwarzman, and hedge fund behemoth Paul Tudor Jones have given to the campaign of Michelle Caruso-Cabrera. The story was first reported by the Financial Times. Caruso-Cabrera, a former CNBC reporter, is going up against Ocasio-Cortez to secure the Democratic nomination for New York's 14th congressional district on June 23. Read More: Schwab's global investing chief says the market's best-performing stocks are due for a surprising rotation for the first time in 12 years — and shares 3 ways to get ahead of the shift The primary is significant as it would pave the way for the winner to be the favorite for the election taking place in November as the 14th district — which covers the eastern part of the Bronx and much of northern Queens — is a Democratic stronghold. Stephen Schwarzman, co-founder of Blackstone has donated $2,800 to Cabro-Cabrera's campaign. A further five Blackstone employees have donated the same amount to her campaign as well. David Solomon, chief executive of Goldman Sachs also backed Caruso-Cabrera to the tune of $2,800, along with three other Goldman employees. Paul Tudor Jones, the billionaire founder of the Tudor Investment Corporation also gave $2,800 to Caruso-Cabrera's campaign. A number of other donors to Caruso Cabrera's campaign include staff at Wall Street firms including Evercore, Elliott Management, and Apollo Global Management. Caruso-Cabrera has raised just over $2 million so far, while Ocasio-Cortez's campaign has received more than $10.5 million, FEC data shows. The median size of Ocasio Cortez' donations is around $10, according to a Financial Times analysis of FEC filings and the online fundraising platform ActBlue. The FT reported while Caruso-Cabrera has received more generous contributions, Ocasio Cortez leads the way in smaller donations. Republican economist Larry Lindsey, told the FT: "Michelle knows more about the world and how things work than probably a solid majority of Congress." Read More: A venture capital fund set up by 2 ex-Googlers has raised a $60 million to invest in deep tech Caruso-Cabrera has been a controversial figure in the Democratic race as she was registered as a Republican until 2015. She authored a book called "You Know I'm Right: More Prosperity, Less Government" in 2010 where she claimed Ronald Reagan, a Republican who served as president from 1981 to 1990, was her favourite president of all time. Ocasio-Cortez told the FT: "It's not surprising that Republicans would finance the campaign of a life-long Republican in a Democratic primary." She added: "While we have pushed against corporate power with policies that favour everyday working Americans, those donors prefer to bankroll a candidate who answers to Wall Street over the needs of our constituents."Join the conversation about this story » NOW WATCH: Why electric planes haven't taken off yet
Here's how 4 financial experts think protests could negatively affect markets and the US economic recovery
Protests and lootings taking place across the US in response to George Floyd's death in police...Protests and lootings taking place across the US in response to George Floyd's death in police custody on May 25 could weigh on both markets and the economic recovery, according to financial experts. Experts worry that mass gatherings such as protests could lead to a second wave of COVID-19 cases and hurt consumer confidence. Here's what four financial experts said about how protests across the US could weigh on markets and the economic recovery. Read more on Business Insider. Protests and lootings taking place across the US in response to George Floyd's death in police custody could weigh on both markets and the economic recovery, according to financial experts. Since Floyd's death on May 25 in Minneapolis, Minnesota, civil unrest has sprung up across the country. At least 4,400 people were arrested in protests over the weekend, The Associated Press reported on Sunday. Six states and 13 cities have declared states of emergency, and the National Guard has been called to help in 21 states and Washington, DC, The Wall Street Journal reported on Monday, citing the Federal Emergency Management Agency. In addition, at least 26 cities across 16 states have imposed curfews. While global markets have focused more closely on the brewing tensions between the US and China that have been renewed in recent weeks, the civil unrest could be a negative catalyst for stocks, according to industry watchers. Read more: GOLDMAN SACHS: Buy these 25 beaten-down stocks all poised to jump more than 18% from current levels Mass gatherings such as protests could lead to a second wave of COVID-19 cases, which could further damage the already fragile US economy. In addition, continued unrest could threaten consumer confidence, a cornerstone of the economy, and hurt local governments and cities already reeling from the coronavirus crisis, experts said. Here's how four financial experts think protests across the country could weigh on markets and threaten the US economic recovery.1. RBC Capital Markets: "The news flow appears to be deteriorating on two fronts." "The stock market seems more focused on the trade war than the civil unrest. We share the market's confusion about what the latter means for the path of US equities," Lori Calvasina, head of US equity strategy at RBC Capital Markets, wrote in a Monday note. She continued: "Nevertheless, there are three reasons why we view it as a potentially negative development for stocks." 1. The S&P 500 has been reactive to news flow. Markets have whipsawed on positive and negative news about the coronavirus, the economy, vaccine efforts, and more since February, Calvasina said. "As June gets underway, the news flow appears to be deteriorating on two fronts," she said. 2. Mass gatherings spark concerns about a second wave of infections. "We'll let the medical experts handle this debate, but will weigh in on why this matters for stocks," Calvasina said. "It bears on how quickly the US economy can get back to something resembling normal. Second wave fears could halt reopening or keep behavior cautious." 3. Consumer confidence could be pressured. "While hit hard, it's never fallen to past crisis lows in early 2020 as has been the case with a number of industrial economic indicators," Calvasina said. "A key question for investors is whether the sequential improvement in business activity and consumer behavior highlighted in May's earnings calls and investor conferences will continue to build. It's far too early to know the answer." Read more: MORGAN STANLEY: The market's hottest stocks are in danger of being disrupted to a degree not seen since the Great Recession. Here's how to adjust your portfolio for the coming shift. 2. Oppenheimer: "Failure to practice social distancing while protesting could undermine recent efforts and progress made in slowing the spread of Covid-19." "A tragic event in Minneapolis that occurred last week has seen not only demonstrations expressing grief and indignation in the community in which it occurred but in a number of other cities stateside over the past few days," John Stoltzfus, the chief investment strategist of Oppenheimer, wrote in a Monday note. He continued: "Unfortunately acts of violent protest and vandalism have resulted in injuries and destruction of property in a number of communities and cities across the country. "The crowds generated by the protests have resulted in concerns by health officials that the proximity and massing of people in demonstrations without masks and the failure to practice social distancing while protesting could undermine recent efforts and progress made in slowing the spread of Covid-19," Stoltzfus said. "In this first week of June investors will be weighing all of the above along with a brace of economic data, the remaining Q1 results of companies yet to report as they ponder which direction the equity market will take next and the election primaries that lie ahead." Read more: Famed economist David Rosenberg says investors are falling into a classic market trap that's historically preceded a further meltdown — and warns 'there's not going to be much of a recovery' 3. Oanda: "The impact will be felt by state budgets of many of the big cities." "Protests following George Floyd's death are spreading like wildfire across the US. After the sixth night of protests, financial markets have been unperturbed, but the impact will be felt by state budgets of many of the big cities," Edward Moya, a senior market analyst at Oanda, said in a Monday note. He continued: "The fiscal hit from dealing with COVID-19 and the recent protests could lead to several government job losses as many states were already strapped for cash and have had difficulty secure federal aid. "The economic recovery is fragile and violent protest across major US cities will make this rebound longer and flatter," Moya said. "For now, risky assets remain supported by the Fed put." Read more: BANK OF AMERICA: Buy these 13 under-the-radar tech stocks poised to outperform amid flaring China tensions and lasting pandemic damage 4. AvaTrade: "The on-going protests and riots do present a threat for the US financial markets." "We believe that the on-going protests and riots do present a threat for the US financial markets as it erodes investor confidence which is already scarce," Naeem Aslam, the chief markets analyst at AvaTrade, said in a Monday note. He continued: "In addition to this, we are also wary that these riots may push the coronavirus numbers higher. "The US officials have worked hard to put a leash on these numbers, and if the problem isn't addressed soon, we may be facing another wave of coronavirus a lot more earlier than currently anticipated."