Contracts on the S&P 500 advanced 2.3 percent as of 11:20 a.m. in Tokyo, while futures on the Dow Jones Industrial Average and Nasdaq 100 Index rose 2.1 percent and 2.4 percent, respectively. During a press briefing on the coronavirus response on Monday, the US President promised Americans that they “will be taken care of” as he hinted at introducing a payroll tax cut to help workers through the economic chaos caused by the coronavirus epidemic. Mr Trump also said that his administration would introduce “major” relief packages to businesses, to help them cope with the market turmoil unleashed by the COVID-19 crisis.
Mr Trump said the details would be revealed on Tuesday and that they would be “dramatic”.
He told reporters that he’d be discussing with Republicans in Congress “a possible payroll tax cut, or relief, substantial relief, very substantial relief. It’s a big number.
“We’re also going to talk about hourly wage earners’ getting help so they can be in a position where they’re not ever going to miss a paycheck.”
The White House would also look at securing loans for small businesses, as well as look at ways to support airlines and cruise lines, which have been particularly hard hit by the coronavirus epidemic.
Donald Trump and Mike Pence
In addition, the President, who owns several hotels, promised financial relief to the hotel industry.
Mr Trump has been a long time advocate for cutting the payroll tax, as a means of stimulating the economy.
The tax is paid by companies and employees to fund Social Security.
Treasury Secretary Steven Mnuchin, however, suggested that such a move would only be a temporary measure.
He said: “The economy will be in very good shape a year from now. This is not like the financial crisis.
“This is about providing proper tools of liquidity to go through the next few months.”
Mr Trump’s payroll tax plans were met with scepticism by congressional Republicans, who are worried that the Government is already running massive debts.
Many remain to be convinced, pointing to the fact that Congress just passed an $8.3 billion (£6.35million) coronavirus aid bill.
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Stock Market Crash
Stock Market Crash
Senator John Cornyn, R-Texas, said a stimulus seemed “premature”, while Senator Chuck Grassley, R-Iowa, chairman of the Finance Committee, said: “I don’t think that’s warranted.”
The US President came in for further criticism from Democrats, who accused him of caring more about the economy than trying to stop the virus’ spread.
Senate Minority Leader Chuck Schumer, D-N.Y. tweeted: “What was glaringly missing from President Trump’s press conference was how he is actually going to combat the spread of the coronavirus and keep the American people safe.
“It seems President Trump is more focused on the stock market than addressing this pandemic.”
The number of confirmed coronavirus cases in the US rose to more than 600 on Monday, including 23 deaths.
Earlier in the day global stock markets went into free fall, as fears grew over the likelihood of a severe recession to come in the wake of the coronavirus epidemic.
Markets posted their steepest falls since the 2008 financial crisis, with billions of dollars wiped off share prices.
The Dow Jones closed down by more than 2,000 points for the first time ever, a decline of 7.8 percent.
In the UK, almost £125billion ($163billion) was wiped off the value of the FTSE 100, as it plummeted by 7.7 percent to finish the day below 6,000 points, its lowest level since straight after the Brexit vote in 2016.
Financial markets in France, Germany and Spain saw losses of about eight percent, outstripping the depths of the eurozone sovereign debt crisis.
Crude oil prices dropped by 25 percent, after the world’s producing countries failed to strike a deal at a meeting of oil cartel members in Vienna last week.
Published at Tue, 10 Mar 2020 02:56:00 +0000