Donald Trump’s positive test for COVID-19 has shaken the markets, nevertheless, hopes for a fresh stimulus package have helped US equities – reports Galt&Taggart in its Global Market Watch.
According to the investment bank, after a bumpy September, when the S&P 500 erased the year-to-date gains reached at the end of August, US equities rebounded to a growth trend in October. Namely, S&P 500 posted an impressive 3.8% weekly gain in the first week of October, the best in 3 months, while technology-heavy NASDAQ was trading close to an all-time high-level hit at the beginning of September (+4.6% w/w).
According to Galt&Taggart, investors are betting on additional fiscal stimulus from the US. Donald Trump tweeted that he had instructed his representatives “to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business”. Nevertheless, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin remain in contact, supporting market sentiment. Notably, Donald Trump raised the additional stimulus package from US$ 1.6tn to US$ 1.8tn. Although odds for the next President are in favor of Democratic candidate Joe Biden (59.1%), this might turn out to be wrong as it was the case in 2016 elections – Galt&Taggart reports:
