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US equity futures rose Monday in hopes that President Donald Trump could be released from the hospital later in the day, alleviating some of the political uncertainty that rocked Wall Street in the previous session.
FILE PHOTO: The New York Stock Exchange is displayed in the Manhattan borough of New York City, New York, USA, October 2, 2020. REUTERS / Carlo Allegri / File photo
MILAN: Stocks and other risky assets rose on Monday as signs that Donald Trump’s health was improving brought relief to markets after uncertainty of his COVID-19 infection sent investors rushing to seek safety last week.
The 74-year-old US president was airlifted to a hospital for treatment on Friday, but his doctors said he had responded well and could return to the White House on Monday.
The MSCI World Equity Index, which tracks stocks in 49 countries, was up 0.4% at 0812 GMT, supported by overnight gains in Asia and a positive start in Europe.
The pan-European STOXX 600 was up 0.7%. S&P 500 futures were up 0.5 percent and Nasdaq futures 0.8 percent, signaling an equally strong start on Wall Street ahead.
However, on the aid rally, there were concerns that Trump’s case could be more severe than public disclosures suggest, and that more restrictive measures by governments to curb coronavirus infections could harm the economic recovery.
Some merchants were concerned about the doctors’ admission that Trump had been administered supplemental oxygen and steroids.
“Many questions remain, including the use of the steroid drug … which is generally reserved for those with serious illness,” said Raymond James strategist Chris Bailey in London. “Global cases now exceed 35 million and several new restrictions in Paris, New York, etc.”,
A poll on Monday showed the euro zone’s economic recovery faltered last month as new restrictions pushed back its dominant services sector.
IHS Markit’s Final Composite Purchasing Managers Index fell to 50.4, just above the 50 mark that separates growth from contraction.
The Trump infection also comes less than a month before the November 3 presidential election, which could lead to more volatility in the market and make the outcome of the vote even more difficult to predict.
“In terms of the impact on the election, we haven’t seen enough polls to assess whether this increases or decreases your chances of winning,” Deutsche Bank strategists said.
According to a Reuters / Ipsos poll released on Sunday, Democratic contender Joe Biden opened his widest lead in a month in the US presidential race.
The VIX volatility index, known as Wall Street’s fear gauge, held near the one-week high it reached on Friday.
Meanwhile, suggestions that Trump might leave the hospital sent oil prices up more than 2%. A growing workers’ strike in Norway that has shut down four of Equinor’s oil and gas fields also helped boost profits.
Brent prices rose 2% to $ 40.1 a barrel and US West Texas Intermediate added 2.2% to $ 37.9 a barrel.
The dollar changed little as investors waited for news about Trump’s health in the United States and the evolution of the tax aid talks in Washington. The dollar index was down less than 0.1 percent on the day at 93.722.
Benchmark 10-year Treasury yields rose to 0.7088% and the yield curve steepened slightly, indicating that investors were comfortable taking more risks.
But euro zone bond yields fell on concerns about possible new restrictions to fight the coronavirus.
The French government has announced new restrictions, closing bars for two weeks. Other countries in Europe are also considering more measures.
Gold, which is often bought in times of uncertainty, fell 0.35% to $ 1,892.1, highlighting a greater appetite for risk.
(This story was resubmitted to correct the grammar in the title)
(Information from Danilo Masoni in Milan, additional information from Stanley White in Tokyo; Editing by Larry King)
