Intense volatility, falling stocks, and further delays in a stimulus package are some of the results investors are considering after President Donald Trump tested positive for Covid-19.
Trump’s diagnosis adds another element of uncertainty to a market that has already been assessing the potential for a legal battle or political chaos after the Nov.3 vote. Now investors are grappling with the possibility of Trump’s poor health and how it could affect the US government.
Clearly this is a risk-free event and the markets act like one. While markets were generally lower on Friday, the pullback was calm and orderly. Futures for US equities fell 1.6%, with small declines in Asian and European equities. The Chicago Options Exchange Volatility Index rose to 29, reaching the highest level in just one week. Safe-haven assets, such as the dollar and gold, were largely stable.
Other investors said Trump’s positive test wouldn’t be a big deal for markets in the long run, especially if it shows no symptoms.
Asia has political stability and strong tech companies in the north. For people looking to make assignments globally, this only makes Asia more attractive. “
“Markets will certainly be spooked by the news of the president’s illness,” said Russ Mold, chief investment officer at AJ Bell.
Chief market analyst at Shinkin Asset Management. “This may also pressure the Fed to adopt a more moderate tone that would limit US yields and hurt the dollar.”
