Global markets rebound after Trump signals optimism on coronavirus recovery
By Eva Dou,
Issei Kato Reuters
SEOUL — U.S. stocks appeared set to recoup some of last week’s losses on Monday, as global markets were stabilized by President Trump’s efforts to demonstrate that he is recovering from a novel coronavirus infection.
European and Asian stock markets rallied after one of Trump’s doctors said the president could be discharged as soon as Monday from the hospital.
U.S. index futures were about 0.5 percent higher in overnight trading, pointing to a likely bounce when the U.S. stock markets open. On Friday, the Dow Jones industrial average shed 0.5 percent, while the Nasdaq fell 2.2 percent.
Information on Trump’s condition remains limited and contradictory. Officials said Trump had suffered two bouts of low oxygen, but also that he was doing well. The president briefly emerged from the hospital on Sunday to wave to supporters from inside an SUV.
Investors said the latest fragments of information suggested Trump was on the mend — or at least that he’s not in rapid decline. This means investors see lower risk of all the national security and geopolitical challenges that would follow if the American president became incapacitated.
[Trump briefly leaves hospital to greet fans as confusion continues over his health]
Khoon Goh, head of Asia research at ANZ, said the full market implications of a serious deterioration in Trump’s condition were still hazy to investors, falling under “unknown unknowns.”
“It really threw out a lot of uncertainty that previously no one really cared to think about,” he said. “It prompts investors to sell first and ask questions later.”
Stock markets slumped around the world on Friday, as Trump, 74, and a number of officials close to him tested positive for the virus. The news added uncertainty to the prospects of the U.S. economic recovery, and it called into question how much bandwidth the Trump administration would have to attend to other matters in coming weeks.
The markets appeared to take a measure of reassurance from images of Trump in a motorcade on Sunday, despite critics denouncing the photo opportunity for putting Secret Service officers at risk of infection.
[Trump’s illness halts campaign just when it needs an October boost]
In Asia, Hong Kong’s Hang Seng Index added 1.3 percent on Monday, after posting its biggest weekly decline in six months last week. The Nikkei in Japan closed 1.2 percent higher.
Aside from Trump’s health, other factors buoying Asia markets on Monday included upbeat economic data out of Taiwan and South Korea, and hopes that the U.S. fiscal stimulus package would be passed, Goh said.
Australia’s ASX200 closed 2.6 percent higher, its best session since June, on investor hopes of more stimulus, including tax cuts, to be revealed in this week’s national budget.
Mainland Chinese stock markets remained closed for the country’s extended national day holiday.
European equities also were in the green on Monday, with London’s FTSE 100 and the Euro Stoxx 50 both up about 0.6 percent.
