Reactions to Trump’s Plan to Re-Open the US and the Markets
After the talks of re-opening the economy of the US, by President, Donald Trump, there have been significant reactions in the markets and the global economy.
Some US governors, while considering the re-opening plans, are equally thinking about the dangers of moving too fast in the face of unresolved issues of testing shortages.
Boeing will also resume production of passenger aircraft next week as the US tries to restart parts of the economy.
About 27,000 workers in Washington state will return to producing planes under strict health and safety measures.
The green light has been given to residents in the US return to the beaches, particularly in Florida.
Also, gyms are eager to open as they are included in the first phase and from the guidelines, it will allow “if they adhere to strict physical distancing and sanitation protocols.”
Meanwhile, news of trial for a possible coronavirus drug, i.e. report of positive initial testing for the coronavirus treatment gave a good look and mood to the trading floors.
“Any successful treatment drug would essentially mean that economies can re-open more quickly, which will be a piece of good news for a rebound in the economies”.
The stock markets and equity markets across America, Europe and the world saw green after the US plan on re-opening and the success of Remdesivir, an antiviral drug produced by Gilead Sciences which has helped several patients with coronavirus symptoms although only passed one, very early test
The Wall Street stocks have risen higher as Europe extends gains.
Global equities surged on as the FTSE 100 closes 2.82 per cent up to5,786.96 while the FTSE 250 jumped 3.13 per cent to 15,859.29.
“with the positive news about Remdesivir and the easing of restrictions in some countries as with the plan of the United States, businesses in Italy, Spain and Austria being re-opened this week with Germany following suit in the coming week. The steps taken so far to return to normal have been small, but at least they are heading in the right direction”.
European shares are moving toward the bull market.
If the gains are sustained, it could put the Stoxx 600 (a wide standard of the continent’s stocks) back into a technical bull market with prices on track away from their recent lows to close up 20 per cent.
Furthermore, Rabo Bank’s Jane Foley said President Trump talk of easing restriction accounted for the rise. In his words,
“The market confidence is built around the perception that the US economy could be primed to restart following the publication of President Trump’s 3 stage plan to re-open the economy.”
But despite the rises in the stocks, the West Texas intermediate is seeing a low at the moment, and it is plunging further into 18-year lows.
It is not necessarily down due to the pandemic but due to the geopolitical tensions with the political cartel OPEC and its key ally, Russia, failing to strengthen the market despite the agreement to a production cut to avoid global oversupply.