The president of the United States of America, Donald Trump on Friday morning confirmed that he has tested positive for coronavirus. The announcement caused volatility across all markets around the globe. Along with him, the first lady Melania Trump was also confirmed to have tested COVID-19 positive.
The president broke the news over the social media platform, Twitter. He tweeted on early Friday morning, “Tonight, @FLOTUS and I tested positive for COVID-19.” The news came out hours after their close aide Hope Hicks was also reported to be tested coronavirus positive. In his tweet, he also added, “We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!”
https://twitter.com/realDonaldTrump/status/1311892190680014849
Dow Jones futures were found to be trading at 1.40 percent at 27,301 points as of 5 p.m. India Standard Time. Nasdaq 100 futures market was also found to be down by 2.17 percent trading at 11,323 points. S&P 500 futures were also found to be down by 1.57 percent and were trading at 3,314.75 points. Stock markets across Asia also saw a drop and European stocks are also being predicted to dip. London’s FTSE 100 was trading during mid-session at 0.78 percent down at 5833.39. Germany’s DAX index had also declined by 1.18 percent to 12,580.44. Swiss market index was also down by 0.63 percent at 10,173.19.
Jeff Henriksen, co-founder, and CEO of Thorpe Abbotts Capital said to CNBC that with the news of the US president testing positive for coronavirus, the spotlight would transfer back on the pandemic. He also added, “That kind of narratives have been playing out over the last three months and you can see it in how some days you will see more growth-oriented companies — companies that are deemed to do well in any kind of world whatever happens to COVID — versus companies that need a recovery do well,” during CNBC’s “Squawk Box Europe” on Friday morning.
The president putting himself into quarantine would mean that this would also pose a struggle before the presidential election that is supposed to take place on November 3rd. Henriksen also said that this would heighten political uncertainty and termed the president’s positive test to be a “game-changer” for market behavior in the short term.
Henriksen also said that Trump’s diagnosis would focus on investors’ minds on the coronavirus pandemic once again. He said, “It really brings into the stark reality that we are potentially going into … a second wave. President Trump getting this really highlights that in a way that I think it will focus attention back on the virus and the effects it will have. I think that narrative is really going to be driving market behavior going forward for the near future.”
After the report of broke out the Australian market was also seen to decline by 1.42 percent to close at 5,983.20. Japan’s Nikkei 225 was also found to be closing at 0.67 percent down at 23,029.90. Shanghai SE found themselves only marginally lower by 0.20 percent as it ended. On the other hand, Hong Kong Hang Seng ended stronger by 0.79 percent and finished at 23,459.05.
Since the news of Trump’s diagnosis, Gold traded higher than before, whereas oil markets tumbled. The oil benchmark of the world, Brent was found to lose 4.2 percent and was priced at $39.20 per barrel. US crude futures also fell 4.3 percent to $37.06 per barrel. Safe currencies such as the Swiss Franc, Yen, Dollar was marked to be soaring high.
Jeffrey Halley, senior market analyst for the Asia Pacific at Oanda Corporation told CNN, “The Trump diagnosis is an immediate negative.”
Kit Juckes, global head of foreign exchange strategy at Societe Generale, said to CNBC, “There’s a risk-averse reaction, so the strongest three currencies in the market are the Swiss franc, the yen and the dollar. That’s just a straight knee-jerk reaction. There’s a spike higher in volatility because I think a lot of people will be saying that they could imagine how this could even increase the uncertainty about the conclusion of the election.”