U.S. markets and stock exchange traded funds jumped as traders rejoiced President Trump’s plans to reopen the economy and a potential coronavirus drug from Gilead.
The equity markets were on pace for a second week of gains after Trump on Thursday said some states with fewer coronavirus cases could begin the first phase of lifting restrictions on social and business activity as early as Friday, pointing out that as many as 29 states that could soon begin the process., the Wall Street Journal reports.
Some U.S. states were expected to reveal outlines for lifting restrictions, a day after President Donald Trump provided his guidelines for a phased reopening of the economy.
Furthermore, hopes of a viable COVID-19 drug also strengthened sentiment after Gilead Sciences’ experimental drug remdesivir showed promise in clinical trials on coronavirus patients.
“Expectations are very low and every time you get a bit of good news – even if there is skepticism attached to the Gilead drug and to the timeline of opening up different regions – it’s still better than anyone would have expected,” Thomas Hayes, managing member at Great Hill Capital LLC, told Reuters.
Andy Maynard, managing director of equities sales and trading at China Renaissance Securities, argued that while effective drugs might take years to develop, the positive results suggest the virus can be countered and that markets would recover.
“The market has attempted, where possible, to take a glass half-full view,” Richard McGuire, head of rates strategy at Rabobank, told the WSJ.
“The virus and its fallout is something that’s going to plague us for some time,” he warned.
Many traders remain cautious of the near-term outlook, especially with this earnings season expected to show extremely substandard results.
“Earnings season has the potential to act as a bit of a wake-up call because companies are going to be providing some clearer guidance on how they see this hitting their revenues in 2020,” Hugh Gimber, global market strategist at J.P. Morgan Asset Management, told the WSJ.
This article originally appeared on ETFTrends.com.