STA‘s Jim Toes comments on the current state of the markets currently being affected by the coronavirus.
The Trump administration plans to keep U.S. stock markets open despite volatility, though trading hours may be shortened, Treasury Secretary Steven Mnuchin said.
“We absolutely believe in keeping the markets open,” Mnuchin said at a Tuesday news conference at the White House. “Americans need to know they have access to their money.”
Mnuchin said he has spoken to banks and the New York Stock Exchange, and they agree on the need to keep markets operating. The possibility of shorter hours caught some executives by surprise.
“Shorter hours make no sense,” Terry Duffy, the CEO of CME Group Inc., the world’s largest futures exchange, said Tuesday in a statement. “We were quite surprised to hear Secretary Mnuchin say he is coordinating with the New York Stock Exchange on possible shortened trading hours, even though he has not reached out to all cash equity and futures markets including CME Group and Nasdaq.”
The New York Stock Exchange said in an emailed statement Tuesday that it’s in constant dialogue with the U.S. government and regulators, and has “no current plans to shorten the trading day.” NYSE’s parent company, Intercontinental Exchange Inc., said in a separate statement that all of its platforms were operating normally.
Wild swings in equity markets and thousands in the financial industry working from home have led to questions about whether stock exchanges should remain open. But top regulators and executives of exchange firms have come out in favor of keeping markets open.
“We certainly would not be in favor of closing the market, we certainly wouldn’t be in favor of shortening the trading day,” Tal Cohen, Nasdaq Inc.’s head of North American market services, said in an interview Tuesday on Bloomberg Television. “That might just increase the intensity.”
U.S. indexes climbed on Tuesday, a day after declines triggered circuit breakers that halted trading before the major indexes plunged to their biggest drop since 1987.
Jim Toes, chief executive officer of the Security Traders Association, an industry group, said on Tuesday that markets need to remain open to “deal with the economy.”
“They can’t close the markets,” Toes said. “They’re functioning, they’re working. Unless something breaks, why?”
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