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- The Dow Jones Industrial Average (DJIA) fell more than 300 points on Monday.
- President Trump launched an attack on China in a scorching city hall accusing the nation of covering up the severity of the coronavirus.
- The Chinese press responded, hitting America’s “moral deficit” and further increasing tensions.
Trump and China exchanged new blows over the weekend when the president launched his most aggressive attack yet at the handling of the coronavirus outbreak by China. The Dow Jones Industrial Average (DJIA) fell lower on Monday in response.
President Trump infuriated the tensions on Sunday night with a series of accusations against China. He accused the nation of trying to hide the virus and suggested that it may have leaked from a Wuhan laboratory.
The Chinese press went into overdrive, accusing the United States of “propaganda war”. The Global Times, China’s English-speaking newspaper closely associated with the Chinese Communist Party, wrote in a heated editorial:
The Trump administration continues to engage in an unprecedented propaganda war as it tries to impede global efforts in the fight against the COVID-19 pandemic.
The coronavirus outbreak has increased tensions between the two superpowers. And it could lead the United States and China to a trade war.
Dow joins weak start to May
The month of May has started with a limp. After dropping 2.5% on Friday, the stock market is spreading losses on Monday.
At 9:47 am ET, the Dow Jones had fallen from 316.67 (1.33%), lowering the index to 23,407.02.
The S&P 500 and Nasdaq fell 1% and 0.5%, respectively.
Was the coronavirus leaked from a Wuhan laboratory?
In an interview with Fox News Town Hall, President Trump said China made a “horrible mistake” in trying to hide the coronavirus. The country is accused of silencing scientists and researchers who raised the alarm in the first days of the outbreak.
The White House has even clung to a marginal theory that Covid-19 leaked from a Wuhan lab. Secretary of State Mike Pompeo claimed there was “enormous evidence” behind this theory. And Trump promised a “conclusive report” on the origins of the virus.
We will present a very robust report on what we think happened, and I think it will be very conclusive.
Chinese press responds to US “moral deficit”
The response from the Chinese press has been ruthless. This morning’s Global Times editorial said Pompeo had “lost his moral compass” by spreading the theory from Wuhan’s lab.
There is a similar reaction in most of the Chinese state press. A recent editorial in the People’s Daily, the official newspaper of the Chinese Communist Party, accused the United States of a “colossal moral deficit. “
The China Global Television Network (CGTN), a state-owned media organization, previously accused Pompeo of “turning its back on humanity” and “spreading a political virus.”
Trump threatens to break the trade agreement with China
The increasingly hostile rhetoric between the two nations is bad news for the stock market. Fear of a trade war between the United States and China rocked the Dow Jones for months between 2018-2020. Those fears are coming back.
We will finish the deal …
… Trump threatened at City Hall last night. It shows how serious he is about holding China accountable.
The economic slowdown has also threatened China’s ability to comply with the phase one trade agreement. The country agreed to buy about $ 200 billion in US goods as part of the deal. But with the Chinese economy devastated by the coronavirus, it may no longer be able to move on.
Dow Jones in focus today
Elsewhere, merchants are taking in the Warren Buffet marathon, a four-hour statement over the weekend. The Omaha Oracle poured cold water in hopes of a rapid recovery in the stock market. He is still on the sidelines with $ 138 billion in cash waiting for a better opportunity.
Across the United States, states are tentatively reopening their businesses this week. Some stay-at-home orders are relaxing as nonessential business resumes. Merchants will watch how consumers respond and whether it triggers a second wave of the virus. Marc Chaikin, CEO of Chaikin Analytics explains.
The biggest risk to the stock market is a premature reopening of the American economy. If the upward curves of Covid-19 re-emerge and the economies close again, the damage to the stock market psyche will be dramatic.
This week’s earnings reports include Coca-Cola, Walt Disney, Fiat Chrysler, Beyond Meat, PayPal, General Motors and Uber.
This article was edited by Samburaj Das.
Last Modified: May 4, 2020 1:49 PM UTC
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