Stocks rallied the last 15 minutes before the close shaving nearly 750 points off the more than 2,000 point intraday loss on the Dow Jones industrials.
The late rally had all the earmarks of the Plunge Protection Team’s moves.
This is the colloquial name given to the executive branch team officially called the Working Group on Financial Markets, which was created in 1988 to provide financial and economic recommendations to the President during turbulent market times.
The group is headed by the Secretary of the Treasury; other members include the Chairman of the Board of Governors of the Federal Reserve, the Chairman of the Securities and Exchange Commission and the Chairman of the Commodity Futures Trading Commission
Ironically the major cause for today’s stock drop is the strength of the US dollar as global investors flock to the greenback for safety. The US dollar index has risen nearly 5% in the last two days.
Intraday stock losses have brought the Dow and S&P 500 below where the indices stood when President Trump took office.
As I wrote yesterday, this huge stock selloff could very well be followed by a V-shaped recovery given the circumstances of the cratering.