Hong Kong, China, Nov 24 – Most Asian markets rose Tuesday as news that Donald Trump’s team will now work with Joe Biden to begin his transition into the White House built on optimism that vaccines could soon be rolled out around the world.
However, the mood on trading floors continues to be tinged by surging virus infections and deaths that have forced governments to impose or consider reimposing economically painful containment measures.
Trump late Monday eased some lingering post-election uncertainty by saying the agency that works with incoming administrations would now work to assist Biden’s team.
The president tweeted that it was time for the General Services Administration to “do what needs to be done”, though he remained steadfast in his claim that he won the election and would carry on with legal challenges to the result.
While the broad consensus has been that Trump would eventually admit defeat, there have been concerns about his refusal to allow Biden to begin work on pandemic response measures and national security matters.
“The power vacuum in Washington looks to be sucking less life out of the markets after the General Service Administration gave the nod to Biden as the apparent winner of the US election,” said Axi strategist Stephen Innes.
The news came as Biden tipped former Federal Reserve boss Janet Yellen for Treasury Secretary, a move welcomed by traders particularly after incumbent Stephen Mnuchin last week sparked a spat with the central bank over access to virus relief cash.
“A strong spirit of cooperation between the Fed and Treasury is one thing of which we can now be assured,” said National Australia Bank’s Ray Attrill.
All three main New York indexes rose Monday, helped by news that Britain’s AstraZeneca and the University of Oxford had said they will seek regulatory approval for their vaccine, adding to hopes for a return to normal after similar announcements by Pfizer/BioNTech and Moderna.
– Dark days ahead –
US dealers also welcomed data showing a forecast-beating rise in activity in both the US services and factory sectors in November.
Tokyo soared more than two percent as investors returned from a long weekend.
Sydney piled on more than one percent with Singapore and Seoul also chalking up healthy gains. Wellington and Jakarta rose though Hong Kong could only eke out small gains on growing concerns about a spike in infections in the city.
Shanghai and Manila fell while Taipei was barely moved.
However, while the long-term outlook brightens, countries from the US, across Europe and increasingly in Asia again are seeing a rise in infections. And with the northern hemisphere winter approaching there are warnings of worse to come, which could deal another blow to the global economy.
“Sadly, the next few months are likely to see the worst of the pandemic in cases and fatalities,” David Kelly, at JP Morgan Asset Management, said in a note.
“In addition, over the same few months a heightened disruption to certain industries will likely lead to a sharp slowdown in both GDP and employment growth.”
“Despite this, the distribution of a vaccine in 2021 will almost certainly trigger a very strong economic revival and by 2022, the economy should be well on its way to a full recovery.”
But Kelly warned that the US economy faced further pain if lawmakers cannot come to an agreement on a new stimulus any time soon, with Republicans refusing to give way to Democrat demands for a multi-billion-dollar package.