Monday, October 5th, investors start in an optimistic mood after information that the state of the US President is good and that he may leave the hospital today. Donald Trump appealed to the Democrats and Republicans to quickly agree on the aid package.
The Dow Jones futures have increased by nearly 200 points, starting a week above Friday’s close. Futures on S&P 500 gained nearly 20 points, and on Nasdaq about 80 points. This is probably a reflection of information that President Trump may leave the hospital on Monday, where he has been on Covid-19 treatment since Friday. Nevertheless, contradictory and misleading news about the president's condition limited the profits, which further increased uncertainty about the impact of Trump's diagnosis on the outcome of the presidential election, in which Joe Biden was definitely gaining the upper hand. Meanwhile, the hope that the new law on the aid package will soon be voted by Congress also seems to improve investor sentiment. Nancy Pelosi, a House of Representatives speaker, said on Sunday that progress had been made and that President Trump was pressing Congress on Saturday to pass the law. If optimism continues, there is a chance that last week's rise in American indices will be sustained.
A better sentiment among investors could also be observed on the oil market, where the price of a barrel of WTI rose by more than 2 percent. In addition to the factors described above concerning the U.S. President and the aid package, strikes could also contribute to price increases. Since Monday, there has been a workers' strike in Norway, which may result in a drop in production by 330 thousand barrels of oil per day, i.e. 8% of total production. Thus, the decrease in production from Norway may be offset by the recently described increase in production from Libya, which amounted to 270 thousand barrels of oil per day. Meanwhile, the number of active rigs in the United States has increased for the first time in two years, according to a report by Baker Hughes on Friday.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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