AP – Stocks wavered yesterday on uncertainty over prospects for fresh economic stimulus and over President Donald Trump’s return to the White House to complete his recovery from the coronavirus.
Trump left the hospital after spending less than three days there, returning from Walter Reed National Military Medical Centre to finish his treatment at home. His doctor, Navy Commander Sean Conley, said the President remained contagious and would not be fully “out of the woods” for another week.
Signs of Trump’s improved condition boosted markets in Asia following an overnight rally on Wall Street. In Europe, sentiment was less upbeat. Germany’s DAX lost 0.3 per cent to 12,784.82 and the CAC 40 in Paris slipped 0.4 per cent to 4,853.12. Britain’s FTSE 100 gave up 0.7 per cent to 5,904.11.
The future contract for the S&P 500 declined 0.3 per cent and that for the Dow industrials edged 0.1 per cent lower.
In Asian trading, Japan’s Nikkei 225 climbed 0.5 per cent to 23,433.73 and the Hang Seng in Hong Kong jumped 0.9 per cent to 23,980.65. South Korea’s Kospi added 0.3 per cent to 2,365.90.
Australia’s S&P/ASX 200 rose 0.4 per cent to 5,962.10 after the central bank kept its policies basically unchanged. Also yesterday, the government announced a big spending financial blueprint for the next few years that will drive business investment and job creation while repairing pandemic damage to the economy.
The annual budget contains a wage subsidy designed to get unemployed young Australians back to work and brings forward planned income tax cuts. The result will be record debt in the current fiscal year through next June.
India’s Sensex surged 0.9 per cent and shares also rose in Taiwan and Southeast Asia.
Markets fell after Trump’s positive COVID test was reported on Friday, tumbling on concerns that a White House victory for Democrat Joe Biden would mean higher taxes and tighter regulations for companies, which could drag down their profits.
Worries over flaring outbreaks of the coronavirus have raised the urgency of fresh stimulus but it’s unclear if the Democrats and Republicans will manage to reach an agreement.
Analysts said a Democratic sweep of the election would allay fears of prolonged conflict over its outcome. It could also raise the probability of a big government support plan for the economy, something that investors have been clamouring for since jobless benefits and other stimulus Congress approved in March expired.
House Speaker Nancy Pelosi told airline executives on Friday to stop the furloughs of tens of thousands of workers because aid for the industry was “imminent”, either as a stand-alone effort or as part of a wider rescue package. A stand-alone bill for airlines failed to advance in the House on Friday, but hopes remain for a larger effort.