On Friday, the markets’ attention was focused on the employment data in the United States, which was much worse than expected and did not lead to any noticeable changes. Finally, investors’ mood changed for the worse after the report on the positive test of Donald Trump and his wife for COVID-19. Immediately after this news, the demand for risky assets fell, and market participants started thinking about this event’s outcome.
What Trump’s coronavirus diagnosis could mean for markets?
A positive COVID-19 test can not only affect Trump’s presidency but also the election race result. Previously, the very fact of political struggle with extreme and sometimes dirty confrontation methods forced investors to show a high degree of caution. But after the president and his wife was infected with COVID-19, the situation became even more confusing.
Trump’s doctors’ optimism regarding his health state and the promise of soon recovery has calmed the markets a little, but this will unlikely be final.
I believe that the markets will react to the daily reports of the US leader illness course. If the news indicates that his illness is mild, and the treatment is successful, this will support the demand for company shares. Negative information will put pressure on the market. The growing uncertainty about the election race’s income will force investors to pay attention to defensive assets such as government bonds of economically strong countries, the dollar and the Japanese yen, and possibly the Swiss franc.
What to expect soon
I believe that the main subject of attention will be the US president’s course of illness. Investor sentiment and markets’ movements will depend on it.