For the past three years, many American business executives have cheered on President Donald Trump as they saw their stock prices soar and their taxes fall. But as the number of confirmed U.S. cases of the coronavirus reaches 158, with 11 deaths, corporate America is taking its own counsel.
From Ford to Google to JPMorgan Chase, a growing number of major companies is banning employees from foreign travel, nixing large meetings, testing out work-from-home contingency plans and canceling crucial industry events — all despite assurances from the White House that containment of the virus is “airtight.”
Investment giant Goldman Sachs has even warned that U.S. corporations’ earnings growth for the year could be zero percent.
The slew of policy updates and revised — or abandoned — financial forecasts for 2020 has put corporate America at odds with an administration that characterizes criticism of its virus response as a “hoax” and dismissed the worst week on Wall Street in more than a decade as an “overreaction.”
Instead, as health and safety officials advise families to stock up their food pantries, Trump’s top economic adviser, Larry Kudlow, told investors they should stock up on equities.
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“The virus story is not going to last forever,” Kudlow said on CNBC last month. “I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.”
Most businesses, however, are focused on prioritizing employee safety without overreacting or creating any economic fallout.
“Corporate America has a vested interest in preserving the well-being of their workers,” said Diane Swonk, chief economist at Grant Thornton. “They are not panicking but are over compensating to hedge against worst outcomes.”
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