European Stocks Soar on Trump’s Health and Stimulus Hopes
European stocks soared on Monday and extended the uptrend into Tuesday as President Donald Trump and the first lady has left the hospital after successfully beating the virus. The rally in energy and tech stocks supported the gains.
Moreover, investors’ hopes over the stimulus package increased significantly after Trump contacted the virus last week.
“Trump’s hospitalization may prove to be the “political trigger” that brings a stimulus deal to the finish line, Barclay’s strategist said. The reports show that House Speaker Nancy Pelosi along with Treasury Secretary Steven Mnuchin met with Jerome Powell regarding the federal stimulus program.
On the Brexit front, European Commission President Ursula von der Leyen and Boris Johnson urged negotiators to “work intensively” to make a trade deal.
Oil price bounced back sharply on Monday and accelerating the momentum into Tuesday trading, helping oil companies like Shell and BP to post strong share price gains.
“Markets may remain choppy over the coming weeks,” said Graham Secker, chief European equity strategist at Morgan Stanley. “Once we get some clarity on the U.S. election, Brexit, and vaccine front, I think that’s going to be a positive catalyst for the market.”
“In the next 3-6 months view, this is a market where you’d want to buy into the weakness because we do expect 2021 to be quite a lot better than what we have been seeing this year,” he added.
Gold price breached the $1900 per ounce mark once again as the yellow metal came under pressure due to concerns over a stronger US dollar. However, the market analysts say Dollar will increase its value in the coming days amid economic recovery, which will negatively impact the yellow metal.
Bars, cinemas, and restaurants stocks are still under pressure due to the threat of the second virus wave. Several countries have announced limited restrictions on travel and leisure businesses to avoid the virus spread.