Today’s October Surprise Even Threw Crazy Cramer off a Cliff!
After saying the stock market’s rally today could best be explained by “the removal of uncertainty,” Jim Cramer got a hyuuge surprise out of a corner from which he least expected it. The surprise that moved the market was not, however, removal of the particular uncertainty that Cramer was talking about. It was removal of an uncertainty Cramer never saw coming.
It wasn’t the kind of October surprise I might have expected either. Yes, I expected some surprise would cause the market to fall, but today’s plunge is not enough to be that fall, though it easily has the chemistry to become the start of it. I did not, however, expect the market to fall due to the news that tripped it over the edge today:
Yes, President Trump removed all uncertainty about a stimulus package to aid the economy and the stock market right before the election.
In response to the Donald’s declaration, the stock market reversed out of the 200-point gain Cramer was was trying to explain and suddenly leaped off a cliff to a 400-point loss in just fifteen minutes! An almost 700-point reversal in fifteen minutes! (It recovered slightly at the end of the day to close down 378 points on the Dow.)
Here was Cramer explaining why the market rallied after Trump came home looking healthier and after Biden went up in the polls enough to remove election uncertainty …
… and here was the stock market after President Trump made his announcement from home:
There is nothing the market hates more than uncertainty. Take it away, stocks go higher!(from the video)
Well, apparently, there is one thing the market hates more — having its hope of fake stimulus removed! Take that away, stocks go lower!
While I questioned a stimulus deal happening a few times here, and thought the lack of agreement over stimulus could easily provide that “October Surprise” in the market I have been talking about, I didn’t see Lucy jerking the football away from Charlie Brown quite like this.
I didn’t see Trump being the one to pull the plug on both the economy and the market. After all, only yesterday, just before leaving Walter Reed, he said “Get a deal done!” That’s why Cramer was so ebullient. He was sure a deal would be done.
Maybe this is one of those infamous and innumerable Trump head fakes, where Trump will announce tomorrow, “Just kidding!” Maybe he is attempting to cajole Speaker of the House Nancy Pelosi into a deal Republicans like better. Then, when she accedes, he’ll say, “Well, the Democrats got off their hands and came around, so I guess we can do a deal anyway.”
We should not be surprised by a reversal tomorrow from Trump. After all, look at the other hyuuge reversal he made today (another surprise almost no one saw coming in October):
Maybe Trump has med head after his hospital stay
Trump said Tuesday that his administration is “asking everybody” who can’t socially distance themselves to “get a mask” and “wear a mask….”
President Donald Trump dramatically shifted his stance on wearing masks over the last several days after months of downplaying their effectiveness.
Trump said Monday that “many people say that it is Patriotic to wear a face mask when you can’t socially distance.”
He also said Tuesday that his administration is “asking everybody” who can’t socially distance themselves to “get a mask” and “wear a mask….”
“Whether you like the mask or not, they have an impact … And we need everything we can get.” (Business Insider)
Now, that’s something I wrote yesterday I did see coming! After his bout with COVID, Trump the mask-denier, I said, might return from the hospital with a much more pragmatic view on the efficacy of masks. For that, I got torched into a cinder on Zero Hedge, but there it is from the Great Pumpkin, himself.
Presidents in the US don’t get re-elected when economies and markets are down. If anyone needed to boost the stock market in an election year, it would be Donald Trump, who is now, by some polls (though we know October polls, too, will surprise us when it comes to Donald Trump), down by ten percentage points, having lost ground in his suicide debate and then having been punched to the ground again by coronavirus.
2020 is certainly a year for twists and turns no one saw coming, so why not the weirdest October Surprise of all — a president who has built his reputation on the rising stock market and supposedly strong economy more than any other president, pulling the plug on the market’s etherial hopes and economic stimulus just a few weeks before the election during the greatest economic slowdown in most people’s lifetimes.
Sure. Why not!