Stocks got two positives Monday—drug industry breakthroughs and a more realistic government approach
Lights shines still in Times Square as people remain at home to stop the spread of coronavirus on March 29, 2020 in New York City. Noam Galai | Getty Images

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"I do think he got mugged by reality," said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. "It may relieve some of the pressure, and I guess the friction, between those who are focused on the health side, who say we have to shut down for a while, and those who want to balance the economic recovery with the health need. … We bought ourselves some mental time about not rushing back too soon." Boockvar said Abbott's announcement that it could quickly start rolling out the test kits was also a psychological positive. "One of the clear aspects of getting it under control is testing, and separating the healthy from the sick," said Boockvar. Availability of testing has been an issue, and the U.S. has lagged some other countries in its ability to test. According to Johns Hopkins University, the number of cases in the U.S. grew above 140,000 and deaths topped 2,500. The New York area remains the biggest hot spot, but Louisiana and Michigan also reported higher concentrations of the illness. Shutting down the economy, by keeping people in their homes and out of crowds and workplaces, is viewed as the most effective way of stopping the spread of the disease. "The fact is getting that April 30 deadline out there is what everyone was thinking about," said Julian Emanuel, chief equity and derivatives strategist at BTIG. "It struck the ideal balance between medicine and economics. From the financial markets' point of view, you have an entire month to continue to look at data about what may or may not happen. [Trump] struck the right balance. It's like everything else. The market doesn't like surprises. The market got something from him last night that was completely consistent with what expectations were. That in itself is a market calming factor. What we're going to be looking for is a volatility calming factor." Emanuel said the volatility has not ended, and there could be a retest of the market bottom set last Monday, when the S&P 500 fell to 2,191. It was at 2,600 at midafternoon Monday. "A lot of the good news about what's been done and what can be done about setting expectations has been out. In the next few weeks, what you're going to see is the numbers start to climb," said Emanuel. "From a market standpoint and a financial standpoint, everything is on the table and now the market is just subject to the ebb and flow of news which, in our view, makes it likely you get some sort of retest of the lows."

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