Against the odds the Dow Jones managed an aggressive rebound on Wednesday, more than reclaiming the losses incurred followed Trump’s negotiations-ending announcement last night.
The sharp gains – the Dow was up 425 points, surging back to 28,200 – seem to be predicated on the fact that Trump wasn’t necessarily anti-stimulus, but rather anti-Democrat. The proximity of the election was always going to make it tough to get a deal done – well, it wouldn’t have if they had pulled their fingers out – and effectively the President opted for politics over policy.
However, he did claim he would push out a package the moment he was elected, with advisor Larry Kudlow stating on Wednesday evening that Trump is keen to support airlines and small businesses via the Airline Payroll Support and Paycheck Protection Program schemes.
At the moment it’s a lot of hot air, and may be setting up the markets for disappointment down the line. Nevertheless, US investors seem to be buying Trump’s pronouncements.
The same couldn’t be said for the European indices, which have reacted to this latest bout of American drama with a shrug – odd, given their movements around Trump’s hospitalisation. The FTSE nudged 0.2% higher, but with the DAX and CAC down 0.1% and 0.3% respectively.
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