Anthony Scaramucci, President Donald Trump’s former communications advisor, sharply criticized his former boss’ handling of the coronavirus (COVID-19) outbreak — saying it could be a “Hurricane Katrina” moment that deepens the market’s correction.
Fears surrounding the virus have roiled markets as the number of cases, and the death toll continues to rise. On Friday, the global toll topped 100,000 cases with well over 3,000 deaths, which has fed a steep global sell-off that’s shaved off trillions of dollars from the market’s value.
Meanwhile, the Trump administration’s response has come under question, while the president himself drew harsh criticism for seeming to cast doubt on the severity of the crisis. On Wednesday evening, Trump called into Sean Hannity's Fox News show and downplayed the mortality rate, which the World Health Organization's pegged at 3.4%.
"The phone call [on Wednesday] to Fox News, easily a trillion dollars ripped out of the market,” Scaramucci, the founder and managing partner of $11 billion fund-of-funds SkyBridge Capital, told Yahoo Finance in an interview.
The former White House Communications director also blasted Trump’s press conference last week announcing Vice President Mike Pence as leading the government’s efforts, underscoring how both events have failed to calm a panicked market.
“And so, what I would recommend to the White House: Get the president off the phone, get him off Twitter, get him out of the press room, and get experts and scientists out there to talk about what is going on and just give the American people the truth,” Scaramucci said.
“And if you do that, markets will calm down, and the volatility will tighten up again in the markets."
President’s ‘Hurricane Katrina’
Calling Trump's messaging surrounding the virus a "woeful under-reaction," Scaramucci likened it to former President George W. Bush’s widely criticized response to the flooding of New Orleans in 2005, which hobbled his second-term.
"This could be the president's Hurricane Katrina," Scaramucci said. "It could be something worse than that if they don't get a crisis response team to talk to him honestly about the mistakes he's making."
When it comes to the markets, though, Scaramucci added that he’s in the “most defensive position” in his 31 years on Wall Street — and the stock market rout has further to go.
SkyBridge is “nervous about the markets. It’s easy see another 15% correction here,” he said, although the Federal Reserve’s policies may help limit the downside. That said, Wall Street has become increasingly pessimistic about the virus’ impact on global growth.
“People are traveling less. Ports are not taking in as much shipments,” the investor said.
“There’s a lot of different things going on right now that are going to cause profits to stall for the S&P 500 (GSPC), which is why I think there’s more to go on the downside,” he added.
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.