President Trump’s top economic adviser is urging investors to buy cheap stocks after days of market free fall as he offered reassurances over the economic impact of coronavirus, saying the crisis did not resemble the 2008 crash.
White House economic Larry Kudlow told FOX Business’s Stuart Varney that economic fundamentals looked strong despite the external shock of COVID-19.
“Stocks look pretty cheap to me Stu, I gotta tell you that,” he said.
He was speaking as markets opened again to losses, with some suffering their worst week since the financial crisis of 2008.
Administration officials have taken pains to say that the U.S. economy will be insulated from some of the worst impacts of any global slowdown.
This week, the White House took control of the response after contradictory statements, with some officials warning of a possibility of “severe” disruption to everyday life, were blamed for creating panic and destabilizing markets.
Speaking in the White House briefing room to reporters, Kudlow said job numbers, consumer spending, and house sales all suggested the economy remained in a strong position.
“The market is the market, but I still think long-term investors should give very serious thought to coming back in or adding to their positions in the stock market,” he said. “By the way, Warren Buffett has said something very similar to that a few days ago. That is still my basic view, because again, our threat assessment is low, and the economy is fundamentally sound.”
That, he added, made it a different situation to what happened in 2008.
“This is about an external shock from something called coronavirus coming out of China and has nothing really to do with internal domestic conditions here in the United States,” he said.
And far from damaging the president’s reelection campaign, he said Trump’s decisive handling of the crisis would have a “very positive effect.” But he said it remained to be seen how the outbreak developed.
“I’m sure in the U.S. and elsewhere there will be more reports of a coronavirus cases. But that does not mean that this thing is going to skyrocket in North American U.S.,” he said.
