Stocks edged sharply higher in early trading Friday, but remained on track for a week of losses that saw major indexes plunge amid uncertainty over the economic impact of the COVID-19 pandemic.
Friday’s gains followed indications that lawmakers and the Trump administration were moving close to an aid package.
Fox Business host Charles Payne told WIBC host Tony Katz that markets are oversold relative to value; however, emotion and panic selling amongst investors could continue to drive stocks lower.
“We’re oversold,” said Payne. “I think we can have one miserable quarter, but then once the economy bottoms out, the stock market will start to sense that long before it actually happens. So if you’re waiting too long for the coast to be clear on the economy, you’re probably going to miss a pretty significant snapback rally.”
He continued: “But you don’t go nuts. If I had $50,000 right now, I’d put maybe $5,000 to work today and play it a little more conservative.”
The Fox Business host noted that China has been ramping production back up in the last couple of weeks and supply shortages will slowly begin to ease in the medium term.
Payne also voiced frustration Democrats voiced opposition to President Trump’s proposal to eliminate payroll taxes to stabilize the economy amid the coronavirus outbreak.
The president announced actions designed to ease the economic cost of the outbreak, including unspecified aid for workers impacted by the virus, a deferment of tax payments for some individuals and businesses and low-interest loans for small businesses.
Democrats were quick to condemn Trump’s proposal to eliminate payroll taxes, despite supporting former President Obama’s two-percent payroll tax cut in 2010.
“Let’s not politicize it,” Payne told Katz. “I don’t understand why the Democrats would be against a payroll tax cut. I just really don’t.”
He continued: “Small businesses must be helped, everyone agrees that those folks working on the front lines, our healthcare workers, must be helped, everyone agrees that people who don’t have the wherewithal to go see a doctor because they don’t have health insurance or they’re afraid to miss work must be helped, the ‘gig economy’ is huge, what do we do for those folks?
“I think there is unanimity helping those people. Start there and work out,” he added.
Click the link below to hear Tony’s full interview with Fox Business host Charles Payne.
Photo: Stephen Ferdman/Getty Images
