ASX Plummets Despite Trump’s $2 Trillion Stimulus Plan

Governments the world over are rolling out the biggest stimulus packages in history.

The US brought out the big guns yesterday, overnight our time.

Donald Trump announced plans for a whopping US$1.2 trillion (AU$2.0 trillion) spending boost. The plan includes direct US$1,000 payments sent to US households within the next two weeks. With more possibly to come.

As Bloomberg reports:

Treasury Secretary Steven Mnuchin pitched $250 billion in checks to be sent at the end of April with a second set of checks totaling $500 billion four weeks later if there’s still a national emergency, according to a person familiar with the matter.

There was no mention of how, when or if this pandemic fighting cash splash will ever be repaid. If the US and other developed nations turn to their printing presses, inflation will likely take off. If not, taxpayers could be burdened with the mounting debts for generations. Unless, of course, we see mass sovereign defaults.

Yesterday’s stimulus announcement from the White House saw the S&P 500 close up 6.0%. In normal times that would be a momentous one day gain. In today’s viral times it almost feels trivial.

Only the day before, on Monday, the S&P 500 closed down 12.0%. Not for the first time this month, those losses were the worst daily plunge since 1987’s Black Monday.

And going by the futures boards, US markets will…again…see some significant losses tomorrow.

It’s the same story the world over.

In Australia the ASX 200 fell 9.7% on Monday. That’s the worst day ever for the index of top 200 Aussie stocks since its launch 20 years ago.

And yesterday?

The ASX 200 closed up 5.8%, its biggest single day gain ever.

As for tomorrow? Who knows…

This is no time for the feint hearted.

PS: While most every stock has come under selling pressure in recent weeks, The Rum Rebellion editor Vern Gowdie lists five stocks he believes you should consider selling immediately. You can find out which ones, and why, in his free special report here.

Bernd Struben is an Editor of The Rum Rebellion. In this capacity, he has access to one of the most intriguing and powerful networks of practical investment insight anywhere in the world.

Bernd has worked on four different continents, and has more than 20 years of professional finance, editorial, and management experience. He holds a degree in economics.

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