Financial markets breathe easier as Trump shows signs of recovery

US President Donald Trump’s controversial drive-by to greet supporters outside the hospital where he is receiving treatment for the coronavirus, and an upbeat assessment by his doctors, have given financial markets a boost on Monday.

But analysts warned that the president’s health could be a source of heightened volatility in markets in the coming days as the November 3 US presidential election draws nearer.

US stocks appeared to be headed for a higher open, with benchmark S&P 500 Index futures up 0.66 percent and Nasdaq index futures rising by 0.96 percent during Asian afternoon trading.

Most Asian stock markets were also higher, with Australia’s S&P ASX 200 index jumping 2.6 percent, its biggest one-day gain in nearly two weeks, and Japan’s Nikkei 225 index was 1.3 percent higher. Hong Kong’s Hang Seng Index gained 1.6 percent, while mainland China’s markets are closed for a holiday.

Oil prices were also up strongly, with Brent crude futures up 2.3 percent and US crude gaining 2.6 percent.

“Every milestone in Trump’s condition, good or bad, can be expected to trigger a shift in risk appetite,” Vandana Hari, founder and CEO of energy research firm Vanda Insights, wrote in a note distributed to clients on the Smartkarma platform.

“Meanwhile, confusion and conspiracy theories, already bubbling in the social media, suggest that markets might be operating without the full picture, further accentuating volatility,” she added.

The medical team treating Trump, who tested positive for the novel coronavirus late last week, says the president was given the steroid dexamethasone because his blood oxygen levels dipped but that he “continued to improve” and could return to the White House as soon as Monday.

The doctors spoke to reporters on Sunday from Walter Reed National Military Medical Center, where Trump was admitted on Friday following the diagnosis.

Trump was driven around outside the facility on Sunday so he could wave to a group of supporters on the street in a move critics derided as a dangerous political stunt.

Video showed Trump, wearing a black mask, waving from the back seat of a black four-wheel drive with two men – also masked – in the front seats.

‘Political theatre’

Dr James Phillips, an assistant professor of emergency medicine at George Washington University, was among those criticising the drive-by, which he called “political theatre”.

“Every single person in the vehicle during that completely unnecessary Presidential drive-by has to be quarantined for 14 days,” Phillips wrote on Twitter. “They might get sick. They may die.”

A keenly watched indicator of expected volatility in US equity markets, the VIX futures Index – also known as the “fear gauge” – surged on Friday to its highest level in nearly a month after Trump and his wife Melania were diagnosed as having the virus, underscoring investors’ expectations of a choppy few weeks ahead.

Meanwhile, investors were also digesting the latest jobs figures from the US, which suggest the economic recovery from the depths of coronavirus shutdowns earlier this year may be slowing, a potentially bad sign for the rest of the global economy.

The US added 661,000 jobs in September, fewer than many economists were expecting, while the unemployment rate fell to 7.9 percent from 8.4 percent in the preceding month.

The drop in the unemployment rate may appear to be a positive for the world’s largest economy, but analysts say it reflects a fall in the number of unemployed people actively seeking a job, as many lose hope of finding employment.

“Employment as a percentage of the working-age population gives us a clearer picture of the US labour market,” James Knightley, chief international economist at Dutch bank ING, said in a research note sent to Al Jazeera. “It is at 56.6 percent, which is where we were back in the mid-1960s when female participation was far lower than it ordinarily is today.”