There has been speculation that the U.S. stock markets could close as the COVID-19 novel coronavirus epidemic unfolds, but Treasury Secretary Steven Mnuchin gave investors some welcome news on Tuesday.
Mnuchin assured investors that the Trump administration and Wall Street have absolutely no plans to close the markets and are committed to keeping the stock markets open for the duration of the pandemic. He did say that trading hours could potentially be reduced if it's determined that doing so would help in the fight for the virus, but this news still gave investors a big sigh of relief.
Why keeping the markets open is such a big deal
As we've seen over the past few weeks, stocks can take investors on quite a roller coaster ride. They can be extremely volatile, and virtually impossible to predict over any short period of time.
There are two big reasons people are willing to put up with the ups and downs and invest in stocks. First, despite any short-term volatility, the stock market tends to produce excellent returns over long time periods. Second, and more relevant to this situation, stocks are highly liquid investments. In other words, if you need to sell your stocks and get your money, you can do so with the click of a mouse or tap of your phone screen at any time during market hours.
As Mnuchin put it, "Americans should know we are going to do everything to make sure that they have access to the money in their banks, to the money in their 401(k)s and to money in stocks."
Having ongoing liquidity in the stock market is one thing Americans had been rather uncertain about for the past week or so. Mnuchin's comments help reassure investors that while there's quite a bit to legitimately be worried about right now, the closure of the stock market isn't being considered.