When Even the Smart Money Panics

by Rick Ackerman

Wall Street kept its cool Friday on news that President Trump and Melania had contracted the virus. Investors were so cool, in fact, that one might have wondered whether even a collision between Earth and a giant asteroid would shake their confidence in the Fed’s ability to levitate shares indefinitely. Although we might have expected the stock market to suffer devastation on a day when the nation’s leader has been stricken with a disease that has killed more than a million people, the broad averages instead faked lower, then higher, manipulated by the usual svengalis to extract maximum profits from the rubes and the panic-stricken. Their hysteria lasted less than hour after word of Trump’s contagion crossed the tape just before 1:00 a.m. In a mere 36 minutes the selloff was over: Dow index futures turned sharply following a 600-point plunge and never looked back. Shares see-sawed overnight, but in the minutes before the opening bell they reignited on a manic binge of short-covering, recouping all but 70 points of what had been lost after the news came out.

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