By Eliman Dambell
The daily briefing by the white house which addresses all actions the US government is taking in relation to the Coronavirus pandemic moved markets on Thursday. This came as we heard President Donald Trump provide the nation an update on plans to reopen the economy after close to 6 weeks of lockdown.
The plan outlined details of a 3 phase approach to “Opening up America Again”. Futures markets in the US like the S&P500 and NASDAQ all rallied on the news, whilst Gold price fell by close to $40 as investors were buoyed by the news from the 45th President of the United States.
Each phase has specific sections attributed to a specific segment of society, the below breakdown will detail the plan of actions for individuals. There are separate steps for employers to take in the process.
As stated in the official document provided by the White House on phase 1, which so far is the most relevant.
“ALL VULNERABLE INDIVIDUALS* should continue to shelter in place. Members of
households with vulnerable residents should be aware that by returning to work
or other environments where distancing is not practical, they could carry the virus
back home. Precautions should be taken to isolate vulnerable residents.
All individuals, WHEN IN PUBLIC (e.g., parks, outdoor recreation areas, shopping
areas), should maximize physical distance from others. Social settings of more
than 10 people, where appropriate distancing may not be practical, should be
avoided unless precautionary measures are observed.
Avoid SOCIALIZING in groups of more than 10 people in circumstances that do
not readily allow for appropriate physical distancing (e.g., receptions, trade
MINIMIZE NON-ESSENTIAL TRAVEL and adhere to CDC guidelines regarding
isolation following travel.”
Essentially this phase decentralises the decision making process and enables individuals with authority to make their own choices, whilst knowing the potential consequences.
Phase 2 then goes on to say non-essential travel can be resumed, whilst phase 3 states that the most vulnerable section of society can resume public interactions.
In regards to a timeline for the phases to be implemented, President Trump stated that this will be down to local Governors to decide, which somewhat moved away statements earlier in the week where the President claimed “ultimate authority” on decisions.
Regarding the move the President stated, “ Now that we have passed the peak in new cases, we’re starting our life again, we’re starting rejuvenation of our economy again in a safe, structured and very responsible fashion”
What does this mean for Markets?
Gold which recently rallied to as high as $1748, which is a near 10 year high, sold off as equity markets rose. As the metal now trades at $1681, the DOWJONES by 750 points or 3.2%, with the S&P 500 up 3%.
So far US markets have rebounded strong, recovering more than half off the losses suffered in March.