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This week in Trumponomics

Yahoo Finance's Rick Newman joins Myles Udland and Melody Hahm to discuss the latest unemployment numbers and President Trump's timeline for reopening the government.

Video Transcript

MYLES UDLAND: Let's move on to the week that has been for President Donald Trump. We'll bring in Rick Newman now for the latest Trumpometer score. So Rick, we've talked over the last couple of weeks about kind of the difficulty, I think, in judging this particular outbreak with the context of what we wanted the Trumpometer to do, which was measure Donald Trump's economic policies and how they changed economic behavior here in the US.

But this morning, another startling number on initial jobless claims. We've now had about 15 million people file for unemployment insurance in just the last three weeks. What's the Trumpometer telling us this week about where things stand in the US economy?

RICK NEWMAN: Well, we've got the stock market up nicely about 10%, it looks like, so far this week. So the market apparently is optimistic about some kind of breakthrough coming in the relatively near future. However, terrible news on jobs, as you point out. And this market rally is pretty flimsy. This could be a bear market trap, as we've been discussing all week.

A couple other things I'm watching, Myles. First of all, the economy now depends on an urgent public health response. Right now, it's not about economic factors. It's about public health measures. And there is still no plan from the Trump administration for reopening the economy.

We've talked about this so many times, but we have to keep repeating it. We need massive widespread testing for the coronavirus. We need antibody tests and many other things in place before businesses can reopen and people can get back to work. And we're just not seeing it.

So there have been several sad readings on the Trumpometer during the last few weeks. That's the lowest level. He's ticking up one notch this week, merely failing. But I think we could have some bad news coming in future weeks.

MYLES UDLAND: Yeah, I think, Rick, it's going to be really interesting here to watch. And you know, some people I've talked to in the market, they think that the next two weeks is when there's a handoff, as it were, from the market, focusing on the coronavirus data, which, you know, as Anjalee outlines, is still startling, but getting relatively better in the US, and a firm hand off to how much we react to that economic data.

Because Powell was asked about it this morning and he kind of punted on the question, but it's something we've discussed here almost every day, which is on the other side of this reopening, I mean, we're still in recession, right? And there's still a really long way to go. And you don't just reopen and everyone runs back out and makes up those trillions of dollars in lost activity we're going to see in April and May.

RICK NEWMAN: I'm puzzled about what makes investors so optimistic. You know, we haven't had second quarter earnings yet. We're going to start trading at bank earnings next week and a bunch of earnings after that. They're going to be-- they're going to be first quarter earnings, and they're going to be down. But you know, second quarter earnings are still three months away, and they're going to be dreadful.

And I just don't understand how investors bidding up stocks think businesses are going to reopen and people are going to go back to work. I mean, flattening the curve does not mean it's safe to go outside. I mean, you've got to press that curve all the way down to the floor almost before businesses can reopen.

And we're talking about it, but to my-- I'm not seeing it-- I'm not seeing the light at the end of the tunnel that Trump says he is seeing. I just need to know, what is going to persuade people to go back to work when everybody knows it's the virus is still out there. We haven't done anything about it. Is wearing a mask going to be good enough? Is more handwashing going to be good enough? I just don't think so. So I remain pessimistic. I think we still have to get over a major hump here.

MELODY HAHM: And Rick, one thing that has been made clear in my mind is that local officials matter more than ever before. Perhaps people who didn't even pay attention to what their governor had previously said seem to be tuning into daily live streams, daily updates.

When you think about how important Trump's rhetoric actually is at this point, even Nikki Haley was penning an op-ed in "The New York Times" yesterday, saying, you know, the attention should actually be put on all of your local governors because this is very much a city by city, state by state thing.

We know that the state of California actually declared a national emergency I think a week and a half before Trump even did. So how vital is Trump's rhetoric here even in terms of getting businesses back open?

RICK NEWMAN: It's a great point because Trump does not have the authority to reopen anything, except the federal government. He cannot order states and cities to allow businesses to reopen. That's up to governors and mayors, and it's up to the businesses themselves. And it's up to employees.

So you've got-- you know, look at what-- look at the map of what's happening in the United States. So we're getting close to a peak of infections and deaths in places like New York, where many of us are, and in New Orleans and Detroit and some big cities. But it's just starting to pop up in some smaller cities and also in some rural areas.

So we're going to have these cascading closures. And even when it is OK for some businesses to go back to work, I mean, it's going to start very, very gradually at first. And I mean, what's it going to take to reopen restaurants? I mean, this is just a question for normal people in cities. When are you going to go feel comfortable going back to restaurants and sitting next to people and not jumping off your chair when you hear somebody cough?

MELODY HAHM: Yeah, those trendy--

RICK NEWMAN: It's going to be-- it's a long ways off.

MELODY HAHM: --going to be long gone.

MYLES UDLAND: I know that all I do when I watch television now is I remark at how close everyone is standing to each other because it's still jarring. And I wonder how long that's going to go on for, at a minimum.

RICK NEWMAN: Well, think about this. What does everybody do now when you hear somebody cough? You go, and you look around to see how close that person is to you.

MYLES UDLAND: I mean I would even say this. Rick. Like, I don't hear anybody cough because I'm not around anybody. So we need to first be comfortable being in the vicinity of another human who isn't someone that lives in our home, and then we can start worrying about what it's like when they cough, which, to your point, I don't imagine it's going to be, like, a not jarring, disturbing experience, but.

RICK NEWMAN: Yeah, so we've been through this many times, but it bears repeating until we get there. We need massive, massive testing and very concerning, the Trump administration indicated this week that it actually wants to get out of federal testing and turn it all over to the states and to the cities. I don't think that is the right way to go.

MYLES UDLAND: And I don't think that those states have the capacity to do that as well because they, as per our previous discussion with Brian Cheung, they play by fiscal restraints. The federal government does not.

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