Global stocks rise on speculation Trump’s health is improving

donald trump coronavirus
  • Global stocks rose on Monday on positive expectations of US president Donald Trump’s health.
  • The president tested positive for COVID-19 on Friday and was admitted to a military hospital hours later. 
  • A number of conflicting reports emerged this weekend about his health, but White House medical staff suggested Trump may be released as soon as Monday.
  • US futures rose in the range of 0.5-0.8%. 
  • Both US and Brent crude oil prices rose after taking a beating on Friday.
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Global stock markets and oil prices rose on Monday, following reports US president Donald Trump is recovering after testing positive for COVID-19 and could be discharged from hospital as soon as Monday. 

US futures on the S&P 500, Dow Jones and Nasdaq 100 traded around 0.5-0.8% higher, suggesting major indices will rise later in the day on Wall Street, meanwhile both Brent and US oil prices recovered around 4%, reversing steep losses on Friday when the news first broke US president Donald Trump and First Lady Melania Trump tested positive for COVID-19. 

Both Brent and West Texas Intermediate were trading 4% higher at $40.69 per barrel and $38.52 per barrel respectively, reversing most of Friday’s losses

A number of conflicting reports were released on the weekend over the state of Trump’s health, after he was moved to the Walter Reed military hospital. One of the reports included a video of himself, saying he feels “much better” before adding that the next few days will be the “real test”. 

The president also briefly left hospital to make an SUV appearance and thank supporters on Sunday, which stoked controversy but suggested his health may be improving. 

This overshadowed comments reportedly made by chief of staff Mark Meadows who painted a more dire picture of his health, revealing Trump’s oxygen levels had dropped over the weekend. 

The president may be discharged from hospital as soon as Monday.

Jim Reid, research strategist at Deutsche Bank, said the video “showing Trump in good spirits” helped lift markets. 

“According to the wires, this has helped S&P 500 futures to trade up +0.61% this morning, but to be honest it could also be because a poll showed that Biden was 14 points up over the weekend,” he said. 

Democrat opponent Joe Biden leads Trump 14 points nationally, a poll produced by NBC and the Wall Street Journal showed on Sunday. 

In Europe, the Stoxx 600 rose 0.6% on the day, led by gains in energy companies and some banking stocks following a modest upbeat session in Asia. 

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Leading the charge was German fertilizer group K+S which rose 18% to the top of the index and Spanish Bank Unicaja rose 12% following a report from Reuters the bank is considering a tie-up with Liberbank to create the country’s fifth biggest lender. 

British energy company Weirgroup rose 16% as it has agreed to sell its oil and gas division to Caterpillar for around $405 million. 

European indices rose across the board, with the FTSE 100, DAX and CAC 40 all up between 0.5-0.9%. 

Markets in China were closed for a national holiday, but the Nikkei gained 1.2%, while Sydney’s S&P/ASX 20  rose 2.6% and Seoul’s KOSPI rose 1.3%. 

Markets were also upbeat due to stimulus optimism. 

House Speaker Nancy Pelosi said Sunday progress is being made on the White House’s next coronavirus relief package, and told executives in the US airline industry to hold off on job cuts. On Thursday, the House passed a $2.2 trillion Democratic coronavirus stimulus plan, but the bill still needs to get through the Republican-led senate. 

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Naeem Aslam, chief market analyst at Avatrade, said: “The U.S. airline sector is likely to remain highly volatile this week, and if the second stimulus aid package becomes a reality, we will not only see the airline stocks skyrocketing, but the U.S. stock market will also rise.”

The US dollar fell against a basket of currencies, falling 0.3% on the back of a gain of this size in the euro. but was up 0.3% against the Japanese yen. Against the Australian dollar the dollar fell 0.3%.

The US 10-year treasury yield rose 2 basis points to 0.71%. 

Analysts at MUFG said: “The high level of political uncertainty we entered in the weekend has eased somewhat with reduced concerns over the health of President Trump. The US dollar is generally softer.”

Gold prices fell 0.1% to $1,904.75 per ounce, while silver rose 0.1% to $24 per ounce.