TOKYO (Reuters) – U.S. senators and officials in U.S. President Donald Trump’s administration have reached an agreement on a massive economic stimulus bill to alleviate the economic impact of the coronavirus outbreak, White House official Eric Ueland said early on Wednesday.
The stimulus package is expected to be worth $2 trillion.
Following are reactions to the agreement:
ALEX WONG, DIRECTOR OF ASSET MANAGEMENT AT AMPLE FINANCE, HONG KONG
“Markets have been expecting this, that’s why we only had some brief upside. People are taking some profit.
“We have had so much policy (support) from central banks, so people are hesitant to short right now. But they would not buy aggressively either knowing that the fundamentals will deteriorate in the short term. They will wait for better signs. I think we will be in some choppy range for a while.”
KIYOSHI ISHIGANE, CHIEF FUND MANAGER, MITSUBISHI UFJ KOKUSAI ASSET MANAGEMENT CO, TOKYO
“This is certainly a big figure, at around 10% of U.S. gross domestic product, which should support equities and other risk-ok trades.
“A lot of the good news has already been priced into the market, so it may be difficult to see a strong rally right away. In the medium term the world’s largest economy has compiled a very powerful combination of fiscal and monetary measures. With this much policy support in place, we’ve likely seen a bottom in U.S. stocks.
“This does make Japan’s response look very slow. Japan’s government will have to step up and offer something big in the form of fiscal stimulus to keep up with other countries.”
JASON TEH, CHIEF INVESTMENT OFFICER VERTIUM ASSET MANAGEMENT, SYDNEY
“No doubt it’s a positive development that they’ve agreed, because if they can’t agree things will turn down further. But once it is approved the question is how it is implemented.
“There will be a lag. We don’t know how long that lag is, but I know this for certain: There will be another initial unemployment claims number coming out and that number will not be pretty. We’re still going to see volatility.
“It’s good the authorities are going to throw everything at it. But if the virus is not controlled in the U.S., then they’re going to have to throw another trillion dollars.”
Reporting by Stanley White in Tokyo, Tom Westbrook in Singapore and Noah Sin in Hong Kong; Editing by Kim Coghill