International markets dropped early Friday after President Trump said that he and the first lady had tested positive for the coronavirus, with European markets opening more than 1 per cent lower in early trading, although they clawed back some territory later in the morning and were drifting at around half per cent lower.
Futures tracking Wall Street initially likewise indicated US stocks would open nearly 2 per cent lower before coming back and of late morning in Europe, they were indicating Wall Street would open as much as 1.5 per cent lower.
The volatility indicated that investors will still be parsing how strongly to react to the news and Donald Trump’s disclosure infiltrated a tremendous amount of apprehension into financial markets, and serendipity is what investors like least.
It throws the political leadership of the world’s biggest economy into doubt and it also raises questions about his campaign for re-election against ex-Vice President Joseph R Biden Jr, his Democratic opponent – the election is set for November 3, a little more than a month away.
Paul Donovan, the chief economist at UBS Global Wealth Management, said in a note to clients that after an initial reaction the news is only likely to have an ongoing market impact if it’s seen as impacting the election outcome or public health, as the market moved early to reflect those jitters.
Investors aspired to put money in acquisitions that were traditionally considered safe havens and the prices increased for the United States Treasury bonds, sending yields lower.
Gold prices also increased, as did the value of the Japanese yen against other currencies.
Investments that are more susceptible to economic and policy changes dropped fast and oil futures slid along with stocks, while other commodities plunged too.
In Japan, where the news broke late on the trading day, stocks were about 0.7 per cent lower after spending most of the day in positive territory. Most other Asian markets were closed for the autumn holidays.
President Trump announced that he and the first lady, Melania Trump have tested positive for coronavirus, throwing the US leadership into uncertainty, but I must say, it didn’t take the coronavirus diagnosis for most to be sceptical about Donald Trump’s administration.
But then has he put this out there because he doesn’t want to face a debate with Joe Biden – it’s not like he’s not fibbed before and it seems that he wants to drum up sympathy from his base and then, he will rise like a Phoenix out of the proverbial ashes.
Sadly, there’s a lot of people in the US that don’t trust their President anymore and they’re becoming extremely distrustful of him.
Is he dodging debates? Is he dawdling to delay the vote? Is he actually sick? And if he is sick, do the public feel compassion for him or do they feel vindicated? But it’s more likely he’ll pop back up in two weeks and say he beat it and it’s no big deal and his disciples will eat that up.
However, if he really is sick, which many people question that he is, then Mike Pence won’t have time to do anything but wring his hands and Trump’s base will lose interest if their God isn’t out there yelling his baloney at rallies – although this is the perfect opportunity for Don Jr to finally shine – he can then get all coked up and be centre stage.
