This is almost comical.
Recall that 15% of Bernie supporters stated in polls they would rather vote for Trump than Biden.
The potential reopening of the economy is not the only fresh prospect easing stock market tensions. Now that the “Bernie Revolution” has officially halted, stocks are surging upwards as investors warm to the fact that a socialist will definitely not be occupying the White House next February.
If you didn’t catch it yesterday, Sanders dropped out of the race.
“U.S. equity markets rallied to session highs on Wednesday after Senator Bernie Sanders announced he was suspending his presidential campaign.”
The gains have lifted the S&P 500 out of the bear market, ending at 2,749.98.
Ed Mills, Washington policy strategist at Raymond James, stated that Sanders’s exit has eased tensions over the economic fallout from his proposals.
“Sanders’s exit removes the tail risk of some of his policies, immediately sets up focus on Biden vs. Trump,” says Mills, “Biden’s policies will get a new scrutiny now [that] he is the presumptive nominee, but the truth of the matter is that the market will be looking towards Washington more to help the economy and much of the assistance matches his platform.”
In other good news, the stock market began to take a positive turn this week as Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, expressed more optimism about the coronavirus and evidence of the flattening curve.
“If the curve is bending, for the first time, some timeline is coming into focus for restarting at least parts of the economy,” said Jim Paulsen, chief investment strategist at the Leuthold Group.
“This means investors can start to reduce their best guesses as to how long this recession will last, and even if the recession is very deep, if its duration can be shortened and known with some greater clarity, this would tend to raise the value of the stock market.”
Market Wraps UP
The Dow Jones Industrial Average DJIA, -0.11% ended lower in the final half-hour of trade Tuesday, reflecting a sharp pullback from intraday highs. This is a market that has been fighting to rebound from the brutal losses of the coronavirus outbreak.
The Dow ended 26 points, or 0.1%, at 22,653, but was as high as 23,617 at one point yesterday – more than a 937-point advance. Wednesday, however, was much more promising, with the Dow reaching 23,433.57 at closing.
The S&P 500 index SPX, -0.16% closed down 4 points, or 0.2%, at 2,659, while the Nasdaq Composite Index COMP, -0.32% ended off about 26 points, or 0.3%, at 7,887 after the technology-laden index enjoyed a 2.9% gain at Tuesday’s peak. On Wednesday, it also closed on a positive note, at 2,749.98.
Stocks have clearly been even more buoyant since signs that the spread of the COVID-19 pandemic may be leveling off in parts of the world.
Release the Wildman
What does crazy Jim Cramer have to comment about the current situation?
Let’s see…
Cramer says there is a key difference between the “coronavirus recession” and the Great Depression.
“This time, the companies that really need money can actually get it. This time, there’s no financial crisis, at least not yet,” Cramer claims, “If you remember, during the bad ole days a dozen years ago, there was very little money to be had, especially for the banks.”
Cramer also mentioned that one hobbled cruise liner’s ability to attract buyers in both the stock and debt markets is a telling sign about the state of the economy compared to a decade ago.
With the leisure industry under enormous pressure from the global coronavirus pandemic, Carnival Corp. saw its shares jump 33% in the last two trading days. This came after the news Monday that Saudi Arabia took an 8% stake in the cruise line and that the company closed on the public offering of tens of millions of common stock.
The company also announced a billions-worth of bond deals.
The Mad Money host also added, “I think it’s incredible that there’s still an appetite for risky debt here, and that could make a huge difference for an ultimate economic comeback assuming the markets don’t freeze up again.”