Markets surge on stimulus hopes

Yahoo Finance's Brian Sozzi, Alexis Christoforous, and Andy Serwer discuss the new U.S. PMI data and the state of the economy.

Video Transcript

BRIAN SOZZI: Andy, we're just getting in some new US PMI data. And this is some of the shocking data from March here. Falls to a record low, the services index. [AUDIO OUT] How-- some of these headlines on the economy, which-- which might be negative, which will probably be negative, how does that hurt Trump's chance for re-election?

ANDY SERWER: Well, right now, you know, I think if the election was held today, you could make a strong case that, if Biden was, in fact, the Democratic nominee, that he would win. But remember, just a couple months ago, you know, it looked like Trump would win re-election handily.

So it's possible that things have flipped now. But as I just said, Brian, it's possible things could flip again. And you know, it's interesting, when you talk about that economic data, because, if you were to make a call, if I were to ask you, are we in a recession right now? I think you'd have to say America is in a recession.

But of course, that's not the official definition of a recession. That would be the Brian Sozzi definition because the actual definition of a recession can only come from one of two measures. First, you have to have a decline in GDP in two consecutive quarters. We won't know about that until July 25 or the NAEBR declares-- or the NBER declares that we're in a recession, which is just something they do looking at a variety of factors.

So you know, right now, we know the economy is slowing. But we don't know exactly how much. And it's sort of ill-defined at this moment.

ALEXIS CHRISTOFOROUS: You know, Andy, it seems as though, in the past few days, especially, with the steps that both the Federal Reserve and the US government are taking to get a handle on this pandemic, our capitalist society is feeling a lot more like a socialist society. And just today, we learned that the president signed into law a bill that requires the president to create an agency, an inter-agency strategy, to secure 5G, fifth generation and future generation technology. Do you think that it is the government's place to do something like that?

ANDY SERWER: Wow, that's a big question and speaks to your definition of government in our society as you sort of hinted at when you-- in beginning of your question. And you know, it goes against the nature of Donald Trump and, in fact, the Republican Party to sort of act like big government, which, in fact, they are doing right now. And of course, the situation calls for that.

But when you're talking about these kinds of measures, Alexis, you really have to go back to the times of Franklin Delano Roosevelt, which was the high point of big government in this country. And of course, the reason why FDR felt compelled to act in that manner is because of very dire economic circumstances, i.e. the Great Depression of the 1930s. And so the only way to respond to that was to have government programs like WPA, et cetera, and all those public works programs, and infrastructure projects to get the country's economy going again.

And you could argue strongly that we're in a situation right now which is going to require big government to do it. But the question is, can the Trump administration and can the GOP have the wherewithal or even the understanding and the desire to act this way in a situation where they might need to do so? That's a huge question.

ALEXIS CHRISTOFOROUS: Yeah, extraordinary times calling for extraordinary measures. Our editor-in-chief, Andy Serwer. Thanks for joining us.