Trump’s positive coronavirus test puts stock market on edge: ‘This is a new uncertainty’.

Global News

Breaking news & current latest Canadian news headlines; national weather forecasts & predictions, local news videos, money and financial news; sports stats and scores.

https://globalnews.ca/

Click to play video 'Coronavirus: Trump says he’s tested for COVID-19 several times a week'

WATCH: Coronavirus: Trump says he's tested for COVID-19 several times a week.

Investors, already skittish ahead of U.S elections in November, now have another thing to worry about: the president’s health.

Donald Trump’s COVID-19 diagnosis triggered a sell-off in stocks and oil and a surge in demand for traditional safe-haven assets such as gold and bonds on Friday.

“The President of the United States has got a disease which kills people. People are de-risking because of that,” Chris Weston, head of research at Pepperstone in Melbourne, said.

Tweet This

But where investors go from here depends, to a large degree, on how the U.S. president copes with a disease which has killed more than a million people around the world.

“This is a new uncertainty in a world which is mixed-up already, which is not the best,” said Chris Bailey, a European strategist at Raymond James.

If his symptoms are mild and he recovers quickly, markets could stabilize and Trump could use the experience to project his image as fighter in the campaign against Democratic challenger Joe Biden.

But if the 74-year-old gets very sick and has to be hospitalized, as British Prime Minister Boris Johnson was earlier in the year, or the virus spreads to other members of his administration, investors will be alarmed.

“What is getting me worried more than anything else is the question mark over the legitimacy of the election process,” David Arnaud, a fixed income fund manager at Canada Life Asset Management, said of Trump’s diagnosis.

The news prompted investors to prepare for a period of heightened volatility, with most agreed that markets will remain on edge for the foreseeable future.

Trending Stories

Volatility gauges rose, with the widely-watched VIX up to nearly 29 points, from around 27 points on Thursday.

Although the moves were nowhere as large as seen during the depths of the market mayhem in March, Trump’s news comes at a critical time with only a month left to the U.S. election.

And in a sign of further uncertainty after the Nov. 3 U.S. election, the premium of the November futures contract on the VIX widened over its December counterparts

There was a similar story in currency markets with one-month dollar-yen implied volatility gauges rising to more than one-month highs near 7.5%. Australian dollar volatility indicators also ticked higher.

Arnaud said that he was positioned for uncertainty in the coming weeks by increasing exposure to safe-haven assets such as the U.S. dollar, Japanese yen and U.S. Treasuries.

U.S. stock futures fell nearly two per cent in London before trimming some losses, while government bond yields slid as investors assessed the impact of the president’s illness and quarantine for financial markets.

While MUFG strategists said Trump’s diagnosis could strengthen his argument of opening up the U.S. economy if he recovers quickly some like Saxo Bank say Biden’s chances of a win had jumped, a negative for risky assets.

Betfair suspended betting on the outcome of the U.S. election on Friday, its website showed. Betfair had Biden’s probability of winning at 60 per cent on Wednesday after the first debate.

Investors, who have driven a long rise in global equity markets, were already nervous given the lack of progress on more U.S. fiscal stimulus and a brief selloff in high-flying U.S technology shares last month.

Meanwhile, yields on 10-year U.S. Treasury bonds fell more than 1 bps to 0.66%, just above a one-month low, a classic signal of investors seeking so-called safe havens.

“Whether it’s Trump or Biden, the biggest problem is uncertainty. As long as we’re uncertain about who will win the election, it is difficult for markets to truly settle,” Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo, said.

View link »

© 2020 Reuters

Related news

The emotional toll of war: Armenians, Azerbaijanis living in Canada embroiled in turmoil.

The two states have been embattled over the territory for decades, culminating in a recent escalation on Sept. 27 resulting in the deaths of 16 military members and civilians.

Pope Francis names 13 new cardinals in surprise announcement.

In a surprise announcement from his studio window to faithful standing below in St. Peter's Square, Francis said the churchmen would be elevated to a cardinal's rank in a ceremony on Nov. 28.

U.S. election: Surge in coronavirus cases shapes final days of campaigning

A record of more than 83,000 infections were reported on Friday alone.

Imran Khan vs Immanuel Macron On Who's «Encouraging Islamophobia» .

Pakistani Prime Minister Imran Khan accused French President Emmanuel Macron on Sunday of "attacking Islam", after the European leader criticised Islamists and defended the publication of cartoons...

1 4

Imran Khan vs Emmanuel Macron On Who's «Encouraging Islamophobia» .

Pakistani Prime Minister Imran Khan accused French President Emmanuel Macron on Sunday of "attacking Islam", after the European leader criticised Islamists and defended the publication of cartoons...

Hundreds march in Taiwan to demand release of 12 arrested Hong Kong protesters.

Hundreds of people marched in Taiwan's capital on Sunday to demand the release of 12 Hong Kong anti-government protesters who were arrested by mainland Chinese authorities in August.

Protesters in Thailand gather for rally ahead of parliamentary debate.

Pro-democracy protesters in Thailand gathered again Sunday in Bangkok, seeking to keep up pressure on the government a day ahead of a special session of Parliament called to try to ease political tensions.

Canadian officials warned staff bound for Cuba to stay silent on ‘Havana syndrome’.

There have been no new reports of mysterious symptoms in two years but still no answers on cause.

«Our Values Are Shared By Majority Of American People» : Kamala Harris.

Democratic vice presidential candidate Senator Kamala Harris has said her party''s views on issues like healthcare and the coronavirus pandemic are shared by a majority of Americans, flaying President...

Trump Seeking New Term «To Help Himself» And His Wealthy Friends: Obama.

US President Donald Trump is seeking a second term to help himself and his wealthy friends, Barack Obama has alleged, as he tore into his successor for not having a plan to combat the COVID-19...

By continuing to browse World News (UAZMI), you acknowledge that you have read the Terms of Use and agree to the use of cookies