US government is considering state ownership of energy companies

Oil price

US companies are under pressure due to the low oil price.

(Photo: Reuters)

Washington The US government is considering state participation in American energy companies, which are under pressure due to low oil prices. “We’re considering a number of alternatives,” said Treasury Secretary Steven Mnuchin in Washington on Thursday (local time). “You can assume that this is one of the alternatives.”

President Donald Trump also said he wanted to help the industry. He suggested that the government could buy both fuel for the country and plane tickets in advance. “The energy business is very important to me and we will build it up,” Trump said. The United States is the largest consumer of oil and can buy the raw material at a high price.

The unprecedented drop in the price of oil at the beginning of the week is now the subject of investigations by the US derivatives regulator (CFTC). “In such a situation, we look at all possible explanations,” said CFTC commissioner Dan Berkovitz of the Reuters news agency. Because of the extreme price fluctuations, you will take a closer look this time.

The oil price had dropped by about $ 40 a barrel within 30 minutes, and for the first time the price of US oil fell into the red. Because of the corona crisis – which should lead to a global recession – there is currently much less demand for the raw material.

More: The drop in oil prices is a warning sign for the global economy. A comment.


Coronavirus – The situation on Saturday: More than 120,000 corona infected people in Germany – Federal President delivers speech

Worldwide, more than 100,000 people have died of Covid-19. Many countries are extending their exit restrictions. Family businesses are facing the end. .

USA want to boost stimulus package by $ 250 billion


US President Donald Trump has instructed Steven Mnuchin (right) to apply for the additional billions, the finance minister wrote on Twitter.

(Photo: AP)

Washington In the corona crisis, additional billions of dollars will flow to small US companies. A government aid program should be increased by an additional $ 250 billion, Treasury Secretary Steven Mnuchin said on Tuesday. The aim is that companies can employ their employees through the coronavirus pandemic.

The money is earmarked for a program that is part of the recently approved $ 2.2 trillion economic stimulus package. The Paycheck Protection Program offers loans to small businesses and already has $ 349 billion in funding.

President Donald Trump instructed him to request the additional billion, Mnuchin tweeted. He has therefore already spoken to Republican Senate Majority Leader Mitch McConnell, House Democratic Chairman Nancy Pelosi, and Senate Top Democrat Chuck Schumer.

McConnell tweeted that he wanted to work with Mnuchin and Schumer in order to get the extra money in a vote in the Senate on Thursday. He had previously warned that the Paycheck Protection Program could soon be dry without the extra funds.

McConnell’s democratic antagonist, Schumer, has demanded more money for workers on the front lines of the healthcare and service sectors. They were supposed to get up to $ 25,000 in “heroes” payment because they were “heroes” – and called them nurses, truck drivers, and cashiers. Workers like her risked their lives to care for Americans during the pandemic.

As early as Monday, House Democratic chairwoman Nancy Pelosi had requested at least another trillion dollars to cushion the impact of the pandemic. President Donald Trump also hinted that more government support is needed. “We will take good care of our people,” said the Republican.

More: Aid program for US SMEs starts off bumpy.


US stock markets end trading week in the red – investors take profits on Boeing shares

Empty trading hall on the NYSE

For the first time in 228 years, the New York Stock Exchange only trades electronically because of the corona virus.

(Photo: AP)

new York Fear of greater economic damage from the rapidly spreading corona virus pushed Wall Street into the red at the end of the week.

The Dow Jones index fell 4.1 percent to 21,636 points. The broader S&P 500 slipped 3.4 percent to 2,541 points. The technology-heavy Nasdaq Composite also fell 3.8 percent to 7,502 points.

Nevertheless: Despite a nervous start to the week, all three important indices have risen by 13 to 17 percent so far over the course of the trading week.

The reason for this was an unprecedented monetary easing by the US Federal Reserve and a government stimulus bill of around two trillion dollars. The House of Representatives is expected to vote on the law this Friday.

By definition, the Dow Jones Index is even back in a bull market, as it has already risen more than 20 percent from its low this week during the course of the trade.

But since both the Dow Jones Index and the S&P 500 are still more than 20 percent below their record highs of mid-February, many traders are certain: Without evidence that the coronavirus can be contained, a further recovery in the should Markets are unlikely.

USA could become the epicenter of the pandemic

“This week’s earnings do not really reflect the market’s confidence that the corona virus outbreak has peaked and that the economic turmoil is over,” said FXTM market analyst Han Tan.

The United States overtook China as the country with the most coronavirus cases with more than 97,000 infections and 1,478 deaths on Thursday and is expected to become the epicenter of the pandemic, according to the World Health Organization (WHO).

A record rise of three million unemployed people per week in the United States gave a first glimpse of the extent of the economic damage.

The stock prices of the oil multinationals Exxon Mobile and Chevron fell by around six percent, following the declining crude oil prices.

The Boeing– Shares slid ten percent. But after an increase of just under 85 percent this trading week, profit taking shouldn’t come as a surprise to investors. Last Monday, the paper cost around $ 94, now $ 162. The paper cost over $ 180 on Thursday.

According to US Treasury Secretary Steve Mnuchin, the corona virus stimulus package is not a bailout for airlines. At the same time, he said in an interview with Fox Business that the aircraft manufacturer Boeing had no intention of using federal funds.

More: Get in or wait? The Dax has fallen low, but not cheap


Billions of aid package failed for the time being in the US Senate

Donald Trump wants to transfer up to $ 1,200 to his citizens. The package, which contains even more comprehensive measures, should be launched this Monday. But that is not certain yet.

The gigantic US aid package planned to combat the corona crisis has failed in the Senate for the time being. In a first vote on procedural questions on Sunday, the opposition Democrats refused to give their consent: instead of the necessary 60, there were only 47 votes in favor and just as many votes against. The final vote on the aid package, which can cost up to two trillion dollars, should actually take place on Monday.

Earlier, Treasury Secretary Steven Mnuchin had raised hopes that the package could be passed in parliament on Monday. “We work around the clock,” Mnuchin said on Sunday in conversation with Fox 5 before the vote. Rapid action is necessary to prevent an economic slump. “We need the money now,” said Mnuchin.

Agreement not clear, however

However, Democratic opposition leader in the US House of Representatives, Nancy Pelosi, has dampened expectations that Congress would approve the US government’s proposed aid package as early as Monday. “In my view, we are still apart,” she said.

As part of the stimulus package, most taxpayers are expected to receive a check for $ 1,200, among other things, there should be an additional $ 500 per child. According to a proposal from the US Treasury Department, around $ 500 billion should be spent on such direct aid alone.

With the stimulus package, the US government also wants to help small and medium-sized companies with loans. In addition, around $ 110 billion is expected to flow into the healthcare sector and unemployment benefits will be significantly improved in the face of layoffs. Loans are also said to exist for large companies such as the aviation group Boeing.

US Senator: “We should be kicked in the ass”

Leading senators from both parties had already said on Saturday that the negotiations were making good progress. Senator Lindsey Graham, who is considered a close confidant of Trump, told Fox News on Sunday that Parliament had to act now to win the war against the virus: “If we don’t do it now, we should be kicked in the buttocks to step.”

Hospitals would get significantly more resources to ensure that they would not be overwhelmed by the virus. In allusion to World War II, Graham said “the virus is Germany” and had to be killed.

Trump sends emergency hospitals to affected countries

In a press conference on Sunday, US President Donald Trump also ordered emergency hospitals to be deployed to the New York, Washington, and California states, which are particularly affected by the novel coronavirus. The civil protection agency FEMA and the armed forces would begin delivering the hospitals within the next 48 hours, Trump said in the White House on Sunday. This should initially provide around 1,000 additional hospital beds in New York, 2,000 in California and 1,000 in Washington.

Are you interested in US politics? Our Washington correspondent Fabian Reinbold writes about his work in the White House and his impressions from the United States a newsletter under Donald Trump. Here you can subscribe to the “Post from Washington” for free, which then ends up in your mailbox once a week.

The US military’s “Mercy” hospital ship, with another 1,000 beds, is scheduled to go into service in Los Angeles in about a week to relieve local hospitals, Trump said. In addition, he released the deployment of the National Guard for the affected countries and imposed an extraordinary emergency, Trump said. Due to the emergency, the federal government can

Analysts fear a recession

Trump had already said on Friday that if the first direct aid payments were not enough, additional payments to the citizens could be decided in a further step. The exact extent of the economic impact of the coronavirus pandemic is not yet clear. However, many analysts now fear a recession.

According to US Vice President Mike Pence, more than 30,000 Americans have so far been tested positive for the virus under the federal agency’s program. There were a total of 254,000 tests. Local tests are not included in the figures. Around 100 million of 330 million inhabitants are now affected by more or less harsh curfews. Such restrictions existed in California, Illinois, New York, New Jersey, Connecticut, Ohio and Louisana.


35-year-old becomes deputy director of the IMF


Geoffrey Okamoto, 35, succeeds David Lipton as the institution’s vice director.

(Photo: AFP)

Berlin The pilot has disembarked and will be replaced by a novice: In the middle of the worst economic crash since the Second World War, the International Monetary Fund is reorganizing its management team.

The experienced Vice Director David Lipton has been – involuntarily – retired. He is followed by Geoffrey Okamoto, 35, a close confidante of Steven Mnuchin, Treasury Secretary. The IMF officially announced this on Thursday.

According to a post-war gentleman agreement, the Europeans appointed the IMF director and the US government was allowed to appoint the first deputy. The ancestors are characterized by top economists and high-ranking officials from the US Treasury. Lipton also followed this tradition. He was a member of the economic advisory board of US President Barack Obama before joining the IMF in 2011.

There Lipton acted as the right hand of the then boss Christine Lagarde and was extremely influential. Lipton was not only responsible for day-to-day business, but also for the strategic orientation of the monetary fund. Lagarde, who was a lawyer and not an economist, left Lipton a lot of space and trusted his advice. She acted more like a president, representing rather than directing.

Lagarde’s successor, the Bulgarian economist Kristalina Georgieva, has other ideas, she wants to take on her management responsibilities more directly. Georgieva draws on skills that Lagarde delegated to Lipton.

IMF chief Georgieva is satisfied

With the inexperienced Okamoto she gets a substitute who will hardly get in her way. Georgieva was very pleased with the personnel decision: “The IMF is doing everything it can to help our members overcome this crisis – and Geoffrey will play a key role in our efforts.”

Georgieva has already announced that the IMF will use all of its power to fight the crisis. The Monetary Fund plans to mobilize up to $ 1 trillion in loans to help countries cut off from the financial markets.

The corona pandemic has already led to panic sales. Investors withdraw their capital from risk markets, the currencies of emerging countries are experiencing strong losses in the currency markets.

As a result, companies and governments there are finding it increasingly difficult to service their loans. Data from the Institute of International Finance show that capital outflows from emerging markets triggered by the Corona shock even exceed the level of the 2008 financial crisis.

More: The IMF calls on states to work together to fight the crisis.


Trump’s argument for re-election is collapsing

President Donald Trump speaks at a Make America Great Again rally at the Civic Center in Charleston, West Virginia.

Leah Millis | Reuters

WASHINGTON – Looking back now, the night of February 4th was probably the height of Donald Trump’s presidency.

A few minutes after 9:00 pm ET, Trump entered the elaborate Chamber Chamber and then happily moved down the aisle, all to the sound of thunderous applause from the Republicans, who sang “another four years.”

This was Trump’s third state of the Union address. Trump’s 90-minute speech was filled with the confidence, self-flattery and entertainment that became the hallmarks of his term.

The speech also reflects his optimism about the economy, a sentiment that millions of Americans shared with him at the time, according to polls. Financial markets were skyrocketing and the unemployment rate was at an all-time low. That afternoon, the Nasdaq Composite Index had reached a record high, at 9,467. The Dow Jones Industrial Average, an indicator that Trump often raises, closed at 28,807 that day, already on track for an all-time high of 29,551 that would hit the end of the month.

The economy wasn’t the only thing Trump was celebrating that Tuesday night. The day before, in the nation’s first Iowa caucuses, the Vermont senator Bernie Sanders had won the popular vote. Sanders is a self-described democratic socialist who would not do as much against Trump in general elections as former vice president Joe Biden would do, according to the poll.

Trump also knew that the next day he would be acquitted in the Senate impeachment process. For Trump, the verdict would represent a long-awaited triumph over his perceived enemies, including Democrats in Congress, whistleblowers in his own White House, and “deep state” government bureaucrats that Trump feared was planning to bring him down.

With his impeachment process behind him and his highest approval score ever, Trump seemed perfectly positioned to easily win the re-election in November.

And now almost everything is gone.

In just over a month, three pillars on which his reelection thesis is based have all collapsed: the strong economy that Trump plans to pursue; the Sanders campaign Trump had planned to run on; and the “us against them” approach to Washington and the federal government, on which Trump built his political mark.

President Donald Trump gives his State of the Union address at a joint session of the United States Congress in the chamber of the United States Capitol Chamber in Washington, the United States, on February 4, 2020.

Leah Millis | Reuters

On Wednesday, the Dow dropped below its closed level on January 19, 2017, the day before Trump took office promising to “make America rich again”. Market losses reflect wider anxieties across the nation, where coronavirus has forced the shutdown of much of the U.S. economy and has made recession almost inevitable.

Meanwhile, Sanders and the progressive far-left movement he promised to build failed to win over Democratic primary voters. Instead, they are ready to appoint a moderate expert, Biden, to race against Trump in the fall.

Back in Washington, Trump is attempting to orchestrate a sprawling federal response to the coronavirus epidemic backed by a White House messaging machine that produces daily praise releases that embrace Trump’s “whole government” approach.

But by promoting massive federal spending through large government programs, Trump undermines one of the central principles of Trumpism: his belief that the federal government is a corrupt, bloated and broken institution, as the “unelected bureaucrats” who fill the its ranks should not be trusted.

“The coronavirus crisis has revealed that Trump is not well prepared and not a hard worker,” said Matthew Barreto, a professor of political science and Chican studies at UCLA.

“When everything goes well, these deep character flaws are hidden. But when a major crisis strikes, voters will remember that Trump was completely asleep and even passed on misleading and false information.”

As of Thursday morning, there have been more than 9,000 confirmed cases of COVID-19 in the United States and more than 150 Americans had died from it. The stock market had unabated volatility and claims for unemployment benefits for the past week have jumped ahead of a likely increase in layoffs.

Yeah, polls are showing that voters have more confidence in the federal government as a whole than the president does. A recent NBC / Wall Street Journal survey found that 62% of respondents trust the federal government to manage the coronavirus crisis, compared with 48% who said they trust Trump.

The end of prosperity?

“Since my election, US stock markets have increased by 70%, adding over $ 12 trillion to our nation’s wealth, transcending everything anyone believed was possible,” Trump said during his state of the Union address. in February.

The American economy, he said, “is advancing at an unimaginable pace not long ago, and we will never ever go back.” On February 12, eight days after Trump had promised Americans a future full of endless growth, the Dow hit its record high.

But now, less than eight weeks later, panic over the coronavirus pandemic has made the president’s promises empty. Markets dropped by over 30% in a few days. Much of the wealth that Trump claimed credit for has been wiped out.

Many analysts now predict that the U.S. economy could decline by 5% in the second quarter of this year, as schools, bars, restaurants, theaters, gyms and workplaces across the country are closed for weeks to prevent the spread of the coronavirus. . On Wednesday, a JPMorgan analyst warned that the second quarter contraction could go up to 14%.

Major airlines are in danger of bankruptcy as travelers cancel their trips and stay close to home, some by choice, and others on the orders of state and local governments. This is expected to continue until summer, Trump said on Monday, although it may be “longer than that”.

Economists and investors now seem resigned to the fact that the US economy will enter a recession, defined as two consecutive quarters of negative growth. The only questions that remain now are how long the recession will last and how deep it will cut.

On Tuesday, Treasury Secretary Steve Mnuchin reportedly told Senate Republicans that, unless massive government intervention in the economy, the unemployment rate in the United States could rise to 20% in a matter of months. When asked about the comments during a briefing on Wednesday, Mnuchin said that the figure was “an absolute worst case scenario”, but not something that Mnuchin never believed could actually happen.

Steven Mnuchin, U.S. Treasury Secretary, right, speaks next to U.S. President Donald Trump during a Coronavirus Task Force press conference in the White House meeting room in Washington, DC, the United States, Tuesday March 17, 2020 .

Kevin Dietsch | Bloomberg | Getty Images.

But if the final figure turns out to be simply bad or catastrophic, history indicates that they will be terrible for Trump’s re-election prospects.

“It would be very difficult for the president to survive November” if the economy sinks into recession, said William Galston, a senior member of the government at the Brookings Institution. “I can’t think of a precedent for this.”

Despite dire economic warning signs, however, Trump’s re-election campaign still claims ownership of what it calls “Trump’s economy”.

“The basic fundamentals of Trump’s economy are strong and President Trump is ensuring that the solid prosperity that Americans are experiencing is likely to remain,” Kayleigh McEnany, an election campaign spokesman, told CNBC.

Trump’s democratic opponents, he said, “would cancel Trump’s economy.”

This type of boundless economic optimism has long been a part of Trump’s political DNA. So Trump has the will to ignore the economic reality in order to paint a more solar picture of the facts on the ground support, be it the financial markets, the United States economy, his personal wealth or his business.

On Friday, after a month of historical decline, the markets reversed and rose sharply. But Trump’s tweet is still deeply misleading. Friday’s market wave was an anomalous data point and Trump used it to mask a wider reality. Stocks have resumed their drastic falls this week.

With the election and a potential recession looming, Trump’s habit of pretending that the economy is doing better than it really is is becoming increasingly risky, Galston said.

“Trump has to be careful now, not to say things that contradict the evidence of ordinary people’s experiences, what’s in front of them every day,” he said.

“As president, you can say almost anything you want about Afghanistan, Iran or the court cases. But when tens of millions of families have difficulties and experience personal pain, you cannot tell them that the sky is blue when it is green, “He said.

Biden’s bump

Trump is certainly not the first candidate to see the bottom of their biggest campaign promise drop. But there is a saying in politics: if you can’t convince voters that you are the best guy, then convince them that your opponent is the worst. Trump is a master of this type of negative campaign.

“Americans of all political beliefs are tired of radical and rage-ridden left-wing socialists,” Trump said in a campaign demonstration in New Jersey in late January. “Really, the Democratic Party is the socialist party and perhaps worse.” Later in the demonstration. Trump said Democrats “have never been more extreme than they are at the moment,” adding: “These people are crazy. They are inspired by socialists like Bernie. [Sanders]”.

Senator Bernie Sanders speaks during the Bernie Sanders Rally “Bernie’s Back” in Queensbridge Park.

Lev Radin | LightRocket | Getty Images

When Trump said this, the polls actually showed Sanders a comfortable lead in a crowded democratic camp, so there were probably some Democrats taking cues from him.

And it is also true that Sanders embraced the “democratic socialist” label and did not hide his admiration for the economies of the “Nordic model”, which use heavy taxes to redistribute wealth and finance a vast social welfare system.

For Trump, Sanders’ first successes in Iowa, New Hampshire and Nevada were excellent news. Long before the Democratic primary began, Trump had rallied his supporters for more than a year with wild claims about how Democrats are all socialists intent on destroying free markets.

As long as Sanders was in the lead, Trump had the best possible platform to make dark prophecies about what a President Sanders’ socialist hold on America might look like. Trump’s re-election was the last better hope of the voters, the de facto choice for anyone who did not appreciate the idea that the United States became the next Venezuela, the reasoning went.

When Trump swore in his State of the Union speech in February that “he would never allow socialism to destroy American health care,” he was making a direct decision on Sanders’ “Medicare for All” plan.

The night Trump pledged to save America from Sanders, Biden’s campaign was at a crossroads. He had just finished fourth in the Iowa caucus, a milestone that even the candidate admitted was “punched in the stomach”.

The following week, Biden finished fifth in New Hampshire’s first grade, only to finish second in the Nevada caucus. At that point, the Biden campaign was practically on life support. Millions of Democrats across the country were waking up to the real possibility that Sanders – who isn’t even a registered Democrat, he’s an independent – would be on top of the party ticket in November.

But everything changed on February 29, when Biden demolished the rest of the Democratic camp in South Carolina’s long-awaited primary. It was the first primary in the South and Biden won by an astounding margin of nearly 30 points.

Former Presidential Democratic Vice President Joe Biden talks to supporters at an election event at Wofford University on February 28, 2020 in Spartanburg, South Carolina.

Sean Rayford | Getty Images

Since then, Biden has won the lion’s share of primary and democratic delegates. On Tuesday evening, the former vice president won competitions in Arizona, Florida and Illinois, consolidating his almost insurmountable lead over Sanders.

All this good news for Biden, however, is bad news for Trump.

“Trump was hoping to run against Bernie Sanders and play the so-called socialism card, and now that plan has also fallen apart,” Barla of UCLA said. “Vice President Biden will be a formidable opponent who has more experience than Trump in the White House.”

To make matters worse for Trump, Biden has direct experience in response to a national economic crisis, which offers him a unique perspective from which to challenge Trump’s decisions.

“You will hear Biden talk more and more about his role in the 2009 economic recovery package that he helped promote during the Obama administration,” said Baretto.

“The 2008 recession has been very serious. Looking back, most economists give the Obama administration a lot of credit for stabilizing the economy, and Biden has played a role in this.”

As Sanders ‘main campaign fades, expect to see Trump’s campaign work hard to saddle Biden with Sanders’ most polarizing political background.

“Democrats are choosing between two far-left extremists trying to open our borders, destroy millions of jobs by eliminating fossil fuels and oppose travel restrictions” which helped limit the spread of the coronavirus, McEnany said CNBC.

Moments later, McEnany connected them together again, saying: “Both Bernie and Biden would have canceled Trump’s economy and would not have had the leadership needed to guide our country through the pandemic that President Trump is navigating with an all-around approach. American”.

The “invisible enemy”

As Trump and his administration begin putting together a massive trillion-dollar stimulus package managed by the government to mitigate the economic effects of coronavirus, another piece of Trump’s reelection camp is falling apart: Trump’s insistence on be at war against the “big government”, a “rigged system” which he claims is controlled by his enemies, democrats, the media, the “deep state” and the “swamp”.

In 2016, Trump won the presidency in part because his supporters believed he would dismantle a corrupt ruling class of lobbyists and technocrats, “drained the swamp” and “downsized the swollen federal bureaucracy.”

Four years later, federal agencies were really gutted, largely through a combination of attrition, budget cuts, “rationalization” and low morale.

Suddenly, in the face of the coronavirus, Trump’s commitment to combat the administrative state and “drain the swamp” was sidelined in favor of phrases such as “an entirely governmental approach”.

As the Americans, frightened and desperate, have increasingly sought help from the federal government, Trump has begun to confront each other in the past few days, after weeks of belittling and rejecting the threat from the coronavirus. Starting this week, Trump has worn the mantle of the great government himself, taking credit for the federal response and attacking the media for any perceived criticism.

However, turning abruptly from a crusader fighting the evils of the big government into a benevolent bureaucrat ready to distribute big government bailouts, set up task forces and send checks to people in the mail is not easy.

Trump’s profound cuts to the federal workforce over the past three years have already come back to haunt him.

President Donald Trump announces his decision for the United States to withdraw from the Paris climate agreement in the Rose Garden at the White House on June 1, 2017 in Washington, DC.

Vinci McNamee | Getty Images

Last week, Trump was targeted by the 2018 closure of the National Health Council’s global health office in the White House, responsible for coordinating responses to the pandemic. When a reporter asked the president to close the office, Trump became defensive and agitated, calling the question “bad” and saying he knew nothing of the move.

“It’s the administration, maybe they do,” said Trump, apparently referring to his administration.

In order for Trump to argue convincingly for re-election, he will have to find a way to reconcile the two contradictory versions of himself that he is currently projecting. There is the precoronavirus Trump, which built an entire presidency on principles such as not giving government benefits away for free and not trusting career bureaucrats. And there is post-coronavirus Trump, who tweeted this previously unthinkable message on Wednesday morning.

“For people who are now out of work due to important and necessary containment policies, such as closing hotels, bars and restaurants, money will come for you soon,” said the president.

Brookings’ Galston succinctly described Trump’s current situation.

“It’s easy to hate the government until you need it.”

Correction: This story has been updated to clarify how polls characterize Sanders’ chances against Trump in general elections.


German stock market deep in the red again

The course board firmly in view.
Image: Wolfgang Eilmes

The Dax closed relatively well on Tuesday. But the gains are passé on Wednesday at the start of trading. The direction has also changed on Wall Street.

DThe German stock market is on its knees again on Wednesday after having rallied the day before as it had not since October 11, 2019. The standard index Dax gives just under 4 percent to 8,587 points. The market-wide F.A.Z.index also fell by 3.7 percent to 1,556 points.

Martin Hock

The reason is once again that Wall Street cannot maintain its very firm tendency from the previous evening. The futures contracts on the S&P 500 index show a minus of 3.7 percent for Wednesday and this could be even higher. However, the contracts would have hit the lower bound that the Chicago Stock Exchange pulled in at 4 percent.

Sometimes one would think that the difference between the development of the German and the American stock market reflects the difference in the mentality of the peoples. While the German stock exchange seems to have fallen into a permanently negative mood (“German fear”), the American one changes from buying frenzy to sales hangover almost every day.

Even though the Dax rose 2.25 percent on Tuesday, the S&P 500 index rose 6 percent. It was the tenth largest price gain since 1950.

In general, the American stock exchange has not only recorded three of its largest daily losses in the past ten days, but also three of the largest gains. It is a “very historic battle” between bulls and bears, said John Carey, portfolio manager at Pioneer at Bloomberg news agency.

Populist patterns?

The trigger for the renewed U-turn in America was a statement by Treasury Secretary Steven Mnuchin, who said that because of the corona virus, the US unemployment rate could rise to 20 percent if the government did nothing.

There seems to be a pattern here. Politicians in the more populist camp initially downplayed the danger posed by the pandemic, sometimes ridiculing it as a conspiracy. But now they are surpassing doomsday scenarios: the President of the Philippines, Robert Dutarte, is closing the stock exchange, the Australian Prime Minister Morrison swears his country for a long-term suffering and now Mnuchin. Maybe you can appear as a savior if everything doesn’t turn out so bad after all. On the other hand, more moderate politicians are trying to calm down.

At the moment, however, this does not matter for the stock exchange, because fear and lack of information about the consequences of the crisis, which cannot exist, rule there. On Tuesday, hopes prevailed, aroused by the first details about a government program that is under discussion: A total of $ 1.2 trillion (!), 500 billion as a payment to households and a moratorium on mortgage payments are under discussion.

The outlook that analysts are currently giving is little hope: it is not a question of whether there will be a recession following the pandemic, but how bad and how long it will be, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank. The global demand shock will be tougher than that after 2008. The entire population will be affected: financially, physically and psychologically.

But the effects did not continue on the Asian stock markets. In Japan, the Nikkei index lost its plus from morning trading and dropped 1.7 percent to a closing level of 16,727 points. The prices on the stock exchange in Seoul lost 4.9 percent after changing trading. The leading index Kospi closed at 1591.20 points. There were also losses in China and Hong Kong.


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Stock market deep in the red again

Mone would sometimes think that the difference between the development of the German and the American stock market reflects the difference in the mentality of the peoples. While the German stock exchange seems to have fallen into a permanently negative mood (“German fear”), the American one changes from buying frenzy to sales hangover almost every day.

Martin Hock

On Tuesday, the Dax rose a moderate 2.25 percent, while the American S&P 500 index rose 6 percent. It was the tenth largest price gain since 1950.

And on Wednesday the stampede goes in the other direction again, the S & P-500 posted 5.5 percent minus at the opening of the trade and the Dow Jones Index fell by almost 6 percent and for the first time since the beginning of 2017 below the 20,000 point mark.

The American stock exchange has shown its extreme side in recent days: So far, it has not only recorded three of its largest daily losses, but also three of its largest gains. That was the last time in the early thirties – which proves once again the extraordinary nature of the current stock market situation.

The German stock market also dropped to its knees at the start of trading on Wednesday, after having risen as much the previous day as it had not since October 11, 2019. After the Wall Street start, he went one step further: the minus of the standard value index Dax is currently just under 6 percent. With 8406 points, the status from summer 2013 was reached. The market-wide F.A.Z.index falls 5.3 percent to 1,530 points.

It was already clear in the morning that Wall Street would not be able to maintain its very firm trend from the previous evening. The futures contracts on the S&P 500 index followed and showed a minus of 3.7 percent for Wednesday. That was even higher now because the contracts had hit the lower limit that the Chicago Stock Exchange pulled in at 4 percent.

Populist patterns?

The trigger for the renewed U-turn in America was a statement by Treasury Secretary Steven Mnuchin, who said that because of the corona virus, the US unemployment rate could rise to 20 percent if the government did nothing.

There seems to be a pattern here. Politicians in the more populist camp initially downplayed the danger posed by the pandemic, sometimes ridiculing it as a conspiracy. But now they are surpassing doomsday scenarios: the President of the Philippines, Robert Dutarte, is closing the stock exchange, the Australian Prime Minister Morrison swears his country on a long-term suffering and now Mnuchin. Maybe you can appear as a savior if everything doesn’t turn out so bad after all. On the other hand, more moderate politicians are trying to calm down.

At the moment, however, this does not matter for the stock exchange, because fear and lack of information about the consequences of the crisis, which cannot exist, rule there. On Tuesday, hopes prevailed, aroused by the first details about a government program that is being discussed: A total of $ 1.2 trillion (!), 500 billion as a payment to households and a moratorium on mortgage payments are under discussion.

The outlook that analysts are currently giving is little hope: it is not a question of whether there will be a recession following the pandemic, but how bad and how long it will be, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank. The global demand shock will be tougher than that after 2008. The entire population will be affected: financially, physically and psychologically.


With helicopter money against the corona crisis

Donald Trump and Steven Mnuchin

The US President and his Treasury Secretary announce the fight against the corona crisis with helicopter money.

(Photo: AP)

New York, Washington The US government plans to use helicopter money to alleviate the economic consequences of the corona crisis and to pay citizens directly. “We want to send checks immediately. Americans need cash now, and I mean in the next two weeks, ”said Treasury Secretary Steven Mnuchin in a press conference on Tuesday. (You can follow all current developments here in the news blog)

How high these checks will be is still being determined. In addition, the government is planning aid measures for small and medium-sized companies, said Mnuchin.

The aid package is expected to total over $ 1 trillion, making it the largest in US history. Even bigger than the Troubled Asset Relief Act, which the US government used to help the ailing banks at the height of the financial crisis in 2008.

Behind the record aid is the US government’s admission that the economic consequences of the corona pandemic will be far more dramatic than originally thought. In a radical turnaround to his previous statements, Trump had admitted on Monday for the first time that the virus was “not under control” in the US and that the US was “possibly” on the way to a recession.

He also recommended that the U.S. population forego all unnecessary travel, refrain from meeting in groups of more than ten, and stop eating in restaurants. The US stock markets had accelerated their downward slide after Trump’s appearance.

Handelsblatt Morning Briefing - Corona Spezial

On Tuesday, the US Federal Reserve (Fed) also announced that it would also buy short-term corporate bonds in the future in order to revive the frozen market for these so-called commercial paper markets.

Wall Street responded positively to the Fed decision. The US government’s rescue package then gave additional impetus. The S&P 500 was still up 6.5 percent during the government press conference. The leading Dow Jones index rose by over four percent.

Support for airlines

Mnuchin made it clear that Trump’s original call for a suspension of income tax would be abandoned. Instead, the government would send consumer checks to citizens.

Earlier, several American media had unanimously reported that the US government was planning a new aid package. According to the reports, it should primarily include deferral of tax payments for employees and companies and aid loans for small and medium-sized companies. There was also support for US airlines, which have lost a large part of their business due to corona-related travel restrictions.

US President Donald Trump pledged “100 percent support” to the aviation industry on Monday. On Tuesday, Trump explicitly announced support for the largest US airline: “We will Boeing help, ”stressed Trump. The Airbus competitor’s share has lost around 60 percent since the beginning of the year.

The helicopter money – a direct payment from a central bank or government, therefore from “above” – ​​is now surprising, as is the enormous volume of over a trillion dollars. The aid package now being planned would be the third one with which the US government is responding to the corona crisis. A first, already adopted package of measures worth a good eight billion dollars is intended above all to equip the US health system for the expected rush of corona patients.

A second package of around $ 100 billion is currently available to the Senate for approval. Among other things, it should include an obligation for smaller companies to continue paying their employees wages in the event of illness. The US government wants to prevent corona sufferers from getting into financial difficulties or even coming to work despite being infected.

The House of Representatives, the second chamber of the US Parliament, has already approved this package. However, some Republican senators criticize that small businesses with breakdown in sales could be driven into bankruptcy by the obligation to continue paying wages.

The Democrats in the Senate and House of Representatives are also currently working on their own bill for additional Corona aid.

More: Economist Felbermayr expects the “mother of all recessions”.