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Dow Jones Rally Teeters Because New York Is a Coronavirus Time Bomb

Last Updated September 23, 2020 1:46 PM
Ben Brown
Last Updated September 23, 2020 1:46 PM
  • The Dow Jones Industrial Average (DJIA) shot higher on Wednesday after a historic rally on “Turnaround Tuesday.”
  • But New York is emerging as the new global hotspot for coronavirus
  • The United States is on track to surpass Italy and even China in number of Covid-19 infections.

The stock market’s roaring comeback continued on Wednesday. After a historic 11% surge yesterday, the Dow Jones recovered from some pre-market volatility to head for its first set of back-to-back gains in more than a month.

The recovery comes as New York emerges as a terrifying global hotspot for the coronavirus. Despite Trump’s hopes to return to normal by Easter, New York governor Andrew Cuomo sent a warning to the nation :

We are your future. Where we are today, you will be in three weeks, four weeks, five weeks, six weeks.

coronavirus cases in the US
The United States now has 55,238 confirmed cases of Covid-19, second only to Italy and China. | Source: John Hopkins University

Cases in the New York area now stand at 25,000  and the rate is doubling every three days. The United States is poised to overtake Italy in terms of confirmed cases. The country may even surpass China within the next week if containment measures don’t work.

Dow grinds higher on stimulus hopes

The Dow Jones Industrial Average (DJIA) recovered from substantial pre-market volatility to push higher as Congress prepared to move forward with a $2 trillion stimulus agreement.

But by 9:55 am ET, the Dow had pared its gains while other indices fell into decline:

  • The Dow rose 125.52 points or 0.61% to 20,830.43.
  • The S&P 500 dipped 0.32% to 2,440.16.
  • The Nasdaq lost 0.54% to trade at 7,377.50.
dow jones today, stock market
This Dow Jones futures chart shows how volatile the stock market was during overnight trading. | Source: Yahoo Finance

Congress delivers a $2 trillion rescue package

After days of political infighting, the White House and Congress will finally deliver a $2 trillion fiscal stimulus package . Senator Mitch McConnell emerged at 2 am ET Wednesday to announce the news:

At last, we have a deal. In effect, this is a wartime level of investment into our nation.

In the face of widespread economic panic and potentially millions newly unemployed, Senator Chuck Schumer declared:

To all Americans I say, ‘Help is on the way.’

The rescue package, which dwarfs the $800 billion during the 2008 crisis, saw the Dow Jones rally to its best percentage gain since 1933.

Dow not convinced by Trump’s Easter timeline

As the bill made its way through Congress, Trump reiterated his commitment to kickstart the U.S. economy. He said he wants the country ‘opened up and raring to go’ by Easter Sunday .

I give it two weeks… We will assess at that time and give it more time if we need a little more time. We have to open this country up… Easter is a very special day for me… and you’ll have packed churches all over our country.

Trump’s optimistic handling of the coronavirus has also given him a bump in the approval polls. According to the latest Gallup poll, the president’s job approval is at 49% , equal to his personal best. The report cites Trump’s handling of the coronavirus pandemic as the main reason for this bump.

President Donald Trump may be enjoying a small rally in public support as the nation faces the COVID-19 pandemic.

Can the U.S. economy recover in two weeks?

The question is: can Trump deliver? Health professionals and economists disagree with the president’s ambitious Easter timeline. A two-week turnaround seems particularly in doubt as New York emerges as a new epicenter of the virus. And then there’s the lack of real logic behind Trump’s Easter promise. Why did he choose that date?

I thought it was a beautiful time. A beautiful timeline

The reality, however, looks very different. New Yorkers are leaving the city in a mass exodus. The White House was forced to issue a warning and ask those who left the city to self-isolate for 14 days .

Everybody who was in New York should be self-quarantining for the next 14 days to ensure that the virus doesn’t spread to others, no matter where they have gone, whether it’s Florida, North Carolina or out to far reaches of Long Island.

Elsewhere, India announced a nationwide lockdown of 1.3 billion people. Japan has postponed the Olympic games until next year. And deaths in Spain are close to overtaking China’s death toll.