Stocks slip after Donald Trump tests coronavirus positive

LONDON: News that US President Donald Trump and his wife Melania had tested positive for the coronavirus rocked global markets on Friday, stoking uncertainty in the world’s biggest economy just one month before Americans go to the polls.
Confirmation of the positive test overnight first hit Asian bourses, setting up Europe for a weak start, which was confirmed when Wall Street followed suit and opened about one per cent lower.
Investors then trimmed their losses, however, on the view that at this stage at least, there was no reason to panic — although that could change given the huge potential implications of a president falling ill weeks ahead of a crucial election. analyst Patrick O’Hare said the initial “knee-jerk sell-off makes sense” given no one knows how the president’s diagnosis will affect the vote, negotiations on a fresh fiscal stimulus package or a pending contested Supreme Court nomination.
However, O’Hare said the fact that the market stabilised after the initial fall shows investors were not “catastrophising” the possible outcomes.
Oil prices followed a similar pattern, but underlying concerns about too much supply and too little demand remain firmly in place, while US jobs data were weaker-than-expected, adding to doubts about the economic recovery.
“The increase in political uncertainty connected with Trump’s diagnosis is… weighing on stocks and stock futures,” Rabobank analyst Jane Foley said.
“There are sufficient unknowns at this stage to fan speculation that the election could be quite different from the one that was expected just 24 hours ago.”
The extraordinary setback for Trump, 74, has immediate political consequences just 31 days before election day, forcing him to cancel campaign trips and adding new volatility to an already turbulent contest.
The White House doctor said that Trump, who was later reported to suffering “mild symptoms,” would continue his presidential “duties without disruption”.
The president took a test after close aide Hope Hicks tested positive earlier in the day, with both he and his wife then going into quarantine at the White House.
“We are seeing some risk aversion on the back of the Trump news, although as yet the moves we’re seeing are quite modest,” Oanda analyst Craig Erlam said.
“Should Trump’s health deteriorate, I expect we would see more significant moves, but there’s no sign of that at this moment.”

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