ASX 200 Bounces Back After Trump’s Release From HospitalThe ASX 200 (ASX: XJO) bounced hard, up 150 points Monday reversing the damage we saw on Friday afternoon after it was announced Trump would be back at his desk following a brief visit to Walter Reed National Military Medical Centre. Volume was low with many states and China on holiday.
Tuesday saw a second day of gains with the market up 21 points.
- RBA and budget in focus.
- The RBA left rates on hold as expected, though left the door open for a November rate cut.
- Federal budget announced after the bell delivered on many of the elements people expected, a large focus on jobs, not surprisingly the key focus. Tax cuts, cash handouts, investment in manufacturing, wage subsidies for apprentices and infrastructure spending some of the key measures.
- NAB forecasting “a quicker recovery to pre-covid levels by H2 2021 and for the unemployment rate to be back towards 6.5% in the June quarter of 2022,” following the release.
Risk-on enthusiasm slowed Wednesday after Trump called an end to stimulus negotiations.
- Tweeting, “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.” The declaration presumably difficult for Fed chair Jerome Powell to digest who once again pressed for fiscal support to help the US economy.
- The polls in the US are pointing to a clear Biden lead with Wall Street seemingly less concerned with a Biden victory and policy implications. The market more enthusiastic about the possibility of a clear and decisive win. The worst-case scenario is a close result and off to the courts we go.