New York Stock Market Falls Again... Trump Attempts Reversal Through Press Conference

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. New York stock market has been showing weakness for the third consecutive day as it fails to escape the impact of the novel coronavirus infection (COVID-19). President Donald Trump, who had been focusing on boasting about economic achievements for his re-election, is scheduled to hold an emergency press conference to calm market anxiety.

As of 2:50 p.m. local time on the 26th, the Dow Jones Industrial Average in the U.S. New York stock market was down 118.37 points (0.44%) at 26,962.99. The Dow showed an early rise, raising hopes of breaking the three-day losing streak, but it gave up all gains and reversed to a decline in the afternoon session. The Dow's drop widened, failing to hold the 27,000 level. The S&P 500 index also reversed to a decline, while only the Nasdaq index maintained an upward trend.

Investment flowed into safe-haven assets, pushing the U.S. 10-year Treasury yield down to 1.30%, marking another all-time low. The decline in Treasury yields means bond prices are rising.

The decline in the New York stock market is presumed to be due to investors returning to a wait-and-see stance amid ongoing negative news related to COVID-19, such as new infections in the U.S. and the first confirmed case in Brazil. Remarks from health officials at a COVID-19 hearing held in the House of Representatives on the same day were also identified as a factor fueling the market decline.

Although the situation is worsening, discord is also detected within the U.S. administration. On this day, The Washington Post (WP) reported that President Trump was angry over the New York stock market's two-day consecutive plunge due to concerns over the spread of COVID-19 and expressed dissatisfaction with the health authorities' response.

This can also be interpreted as a clash between health authorities urging active prevention and countermeasures and the White House's dissatisfaction with unnecessary spreading of anxiety.

A day earlier, the U.S. Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services emphasized the need for preparation, anticipating the spread of COVID-19 infections within the U.S. As this news spread and the stock market's decline widened, Larry Kudlow, chairman of the National Economic Council (NEC), expressed that there were no problems with the COVID-19 response and attempted to calm the situation, but it was insufficient to quell market anxiety.

WP reported that President Trump is very concerned about the stock market and has advised his aides not to provide forecasts that could cause additional anxiety.

President Trump has boasted of the economy as his greatest achievement since taking office, citing stock price increases as a representative example. He has also repeatedly emphasized that COVID-19 is under control.

Some White House officials have expressed dissatisfaction with how Health and Human Services Secretary Alex Azar is managing the situation, and it is reported that President Trump is considering shifting responsibility for the COVID-19 response from Secretary Azar to someone else.

As market concerns grew, President Trump decided to take the microphone himself. Through his Twitter, President Trump said, "I will hold a press conference at the White House at 6 p.m. regarding this issue," adding that CDC officials will join.

There is speculation that President Trump may announce direct response measures at the press conference. Related measures could include raising travel alerts for countries where COVID-19 has recently spread, such as South Korea, drawing attention. The U.S. State Department and CDC announced a Level 2 travel alert for South Korea on the 22nd, and the CDC raised it to the highest Level 3 (avoid non-essential travel) two days later on the 24th.

President Trump also criticized, "Low-quality fake news is doing everything possible to make the coronavirus look as bad as possible, driving the market into panic," and accused, "The incompetent Democrats only talk but do nothing."

A day earlier, Democratic presidential primary candidates in the U.S. united in criticizing the Trump administration's inadequate response to COVID-19 during a TV debate.