US equities rise on Trump recovery
Wall Street equities rallied strongly overnight as President Trump left the hospital and hopes rose of a new US fiscal stimulus plan. US lawmakers have been unable to reach an agreement that would give the green light for a massive stimulus package, although everyone agrees that a rescue package is sorely needed by the US economy in the wake of the Covid-19 pandemic.
Expectations have also lifted markedly that Republicans and Democrats will agree on a new fiscal stimulus package before the US elections in the first week of November. The market spread between the two sides remains $1.5 trillion at $2.2 trillion, a significant gap to cross for sure. Expectations are undeniably rising that a compromise will be reached. I
Asian stock markets, muted by a Mainland China holiday, have been somewhat more cautious, with equity markets only slightly higher across the region. With the world’s eyes glued to minute by minute developments regarding the US president’s condition, investors in Asia prefer to sit on their hands, instead of running the risk from unexpected negative headline bombs out of Washington DC.
Overnight, the S&P 500 rose 1.80%, the Nasdaq leapt 2.32%, and the Dow Jones jumped by 1.66%. In Asia though, the Nikkei 225 is up only 0.45%, with the Kospi climbing 0.70%. Hong Kong has risen 0.75% with Singapore up 0.50%, and Kuala Lumpur up 0.25%. The passing of Indonesia’s new labour and foreign investment law has lifted Jakarta by 0.90%, making it the region’s outperformer today.
In Australia, equities have trodden water over an unchanged RBA, holding rates at 0.25%, with all eyes on this afternoon’s Federal Budget. The All Ordinaries is flat, with the ASX 200 just 0.25% higher.
Asia’s modest session will likely continue into Europe as investors remain wary of presidential Covid-19 headlines.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.