Investors around the world shivered on Friday with prices of stocks falling globally due to fears generated by the news of President Donald Trump and his wife testing positive to the coronavirus.
But the coronavirus has infected 34.3 million people globally with over one million people losing their lives to the ailment. So why are investors reacting negatively to the news of Trump’s CIVID-19 status?
- Uncertainty in the endorsement of market policy which would bring about delay in transaction policy hereby strengthing other currency. For instance, the S&P 500 fell 0.6% and tech stocks were hit particularly hard. The Nasdaq was down 1.6%. Dow futures were down 445 points, or 1.6%, roughly matching their initial move lower after Trump tweeted his condition. S&P 500 (SPX) futures were down 1.7% and Nasdaq (COMP) futures were down 2.3% while the Japanese yen has already increased and was last trading at about 105 yen per US dollar, up 0.4%. Gold prices were little changed at $1,913 per ounce.
- As the election keeps approaching alot of uncertainties arises as the possibilities of President Trump to accept defeat is slim, the news of Trump’s illness is a big clause as this can affect the whole electoral process hereby affecting the outcome and hence the economy of the nation, because an unsettled leadership would lead to an unsettled economy.” This election already had a cloud of uncertainty hanging over it as Trump has refused to say whether he will accept the final vote and has also said that the final result may not be known for months,” said Fiona Cincotta, market analyst at City Index UK.” The markets are already fretting about an uncertain election and this just adds another layer of uncertainty, favouring the risk off trade.” Futures trading before the US market opened had indicated that the main US indexes would drop. “It is prime time now for (the) US election,” said Jingyi Pan, a senior market strategist at IG Group. “Should the President be absent during this period, that could mean even more complications with the election.