The FTSE-100 is little changed this morning at 5,850 after US equities closed off yesterday’s highs in the final hour of trading.
Although the Dow Jones closed up 133 points, or 0.56%, it had been up over 400 points earlier in the day – after initially being supported by news that the US is considering an extension of some China tariff exclusions despite Donald Trump’s recent comments, gains were reduced after the Fed Vice Chair, Richard Clarida, warned that the US economy will need more government support.
However, this warning should not have been a surprise.
Firstly, the 30m Americans who have lost their jobs in the past six weeks clearly underscores the need for more stimulus – and to put that into perspective 30m is roughly the equivalent of the whole of the UK workforce!
And secondly, Donald Trump has already promised more stimulus measures – it is believed that he is considering a number of proposals, although these will be predominately aimed at boosting economic growth, rather than solely supporting the economy, as he continues to push to ease restrictions and reopen the US economy.
Elsewhere, medical progress to combat the infection continues at breakneck speed, with two US pharmaceutical companies announcing significant progress: Pfizer announced a vaccine trial is underway; while Regeneron said its antibody drug could be available within the next few months. This is great news and gives us a sense that we may soon be on the other side of this horrible coronavirus outbreak.
Investment Management Team