In addition to optimism over a covid vaccine, optimism about the economic recovery, and optimism about a fiscal stimulus, we can now add another category of “optimism” cited by traders to justify overnight futures ramps (at least for the next few days): optimism Trump will be discharged from Howard Reed hospital any day now, perhaps as soon as today, and then stage a full recovery. Sure enough, on Monday US index future bounced after doctors said Trump could be discharged from Howard Reed imminently, while sentiment was also lifted amid tentative signs of progress on a new fiscal stimulus.
Late on Sunday Trump released a series of videos in an effort to reassure the public that he is recovering (following by a frenzied tweetstorm on Monday morning), although his condition remains unclear and outside experts warn that his case may be severe. Trump also surprised supporters outside Walter Reed with an impromptu drive through, even as it earned him a fresh round of anger by liberal commentators.
Feeding the improved market tone were comments from House Speaker Nancy Pelosi, who said on Sunday that progress was being made in talks with Treasury Secretary Steven Mnuchin on a new bipartisan package of coronavirus relief measures, although she has said exactly the same thing for weeks now, yet neither party is willing to budge and make the much needed final compromise. Doubts about the scale of further fiscal aid and a slowing economic recovery have weighed on the S&P 500 recently, with the benchmark index in September logging its worst month since the coronavirus-driven crash earlier this year.