Stocks and Futures Rise as Trump Makes Way to Reopen the US in Phases
As the coronavirus pandemic continues to ravage the world, The US has hinted on the possibility of reopening its economy.
The President, Mr Trump said on Wednesday that “The data suggest that nationwide, we have passed the peak of new cases.”
“The data suggest that nationwide, we have passed the peak of new cases.”
In addition to that, in his daily briefing on Thursday, he said that “A national shutdown is not a sustainable long-term solution.” He also said the next step in the fight against the pandemic is “opening up America again.”
The reopening would be under conditions and also a step at a time, according to President Trump. With the plan on the ground, the governors will see to the process.
An 18-page guideline titled “OPENING UP AMERICA AGAIN” has been released by the administration, which proposed a three-phase approach with each phase lasting a minimum for 14 days non-concurrently.
The proposed phased approach will be: based on up-to-date data and readiness, mitigated risk of a resurgence, protects the most vulnerable, and be implementable based on each state Governor’s discretion.
The three phases all have a section for three categories: Individual, Employers, and Specific types of employers.
Phase one is the current nationwide lockdown measures, but activities should be under strict social distance protocols. Resurgences are still expected in this phase.
Phase two allows standard travel to resume if there is no evidence of a resurgence.
Phase three is termed the new healthy life according to the White House coronavirus task force chief Dr Deborah Birx. Under phase three, the states are already seeing a downward trend in cases, and symptoms are already nosediving.
Stocks pushed higher with US equity futures on Friday as tentative steps toward restarting the world’s largest economy helped investors look past mixed progress on containing the coronavirus pandemic and corrupt data from Beijing about their economy shrinkage.
Investors in risk assets are optimistic about the market after the White House sets guidelines to reopen the economy. Moreover, David Bailin, chief investment officer at Citi Private Bank, said on Bloomberg TV that “The market is a bit optimistic right now.”
However, traders were mostly indifferent to the data showing China’s gross domestic product shrank to 6.8 per cent in the first quarter. (Q1) report (below the average projected value of a 6% drop) from Beijing today, which was termed the first decline in at least 30 years by the National Bureau of Statistics (NBS).
What Does This Mean for the Markets?
Main moves in the market across stocks, currencies, bonds, and commodities include:
- Futures on the S&P 500 Index gained 2.4%
- The Stoxx Europe 600 Index gained 2.6% as of 10:31 a.m. London time
- West Texas Intermediate crude sank 8.2% to $18.24 a barrel
- The yield on a 10-year Treasuries gained one basis point to 0.63%
- The Japanese yen strengthened 0.1% to 107.81/ dollar
- The euro declined 0.2% to $1.0822
- The British pound fell 0.2% to $1.2426
- Copper gained 2% to 2.35% a pound