Are Trump's tweets losing their power over the markets? Anil Singhvi explains
The markets on Monday were trading in a positive territory on reports of American and Chinese companies going ahead with trials of their drugs to treat coronavirus, Zee Business Managing Editor Anil Singhvi said.
The markets on Monday were trading in a positive territory on reports of American and Chinese companies going ahead with trials of their drugs to treat coronavirus, Zee Business Managing Editor Anil Singhvi said. The market guru said that stocks have especially reacted positively to the news coming about the US company Novomax starting human trials of the vaccine. The results of first phase of trials are likely to come by July, he said.
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Singhvi further said that the US markets have not reacted to President Donald Trump’s tweets, which indicates that the markets think it was directed more at Joe Biden than China. Trump had tweeted that Biden had given a lot of trade relaxations to China and that he was not tough on the dragon country.
However, there is more to it. Singhvi said that though Trump has been speaking against China a lot, markets are not reacting in a big way, unlike earlier. As such, Trump’s tweets have not been very effective. As an example, take Hydroxychloroquine (HCQ) – which the American President had previously boasted as a cure for coronavirus treatment.
The World Health Organisation (WHO), on the contrary, has said that HCQ is not effective for the treatment of Coronavirus.
Corona cases have been rising in the US and more than 1 lakh people have already died there. There has been no relief on this front, anywhere in the world.
So, what is working for the US markets? The presence of ample liquidity because of measures taken by the Federal Reserve. The bank has been printing money to ensure liquidity in the system and the current rally in the US markets is because of that. The US markets have also gained from ETFs (Exchange Traded Funds).
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The mood of US markets is very clear. The markets are only focusing on positive news and ignoring bad news, concluded the market guru.
12:26 pm