Trump tests positive for coronavirus; stocks, oil prices sink
U.S. stock futures and Asian shares fell Friday after President Donald Trump said he and first lady Melania Trump had tested positive for the new coronavirus.
The future contracts for both the S&P 500 and the Dow industrials dropped nearly 2% but were trading 1.2% lower several hours later. Oil prices tumbled about 3%.
Trump tweeted news of his test results just hours after the White House announced that senior aide Hope Hicks had come down with the virus after traveling with the president several times this week.
The positive test reading for the leader of the world’s largest economy heaps uncertainty onto a growing pile of unknowns investors are grappling with, first among them how it might affect the Nov. 3 election and American policies on trade, tariffs and many other issues beyond then.
“To say this potentially could be a big deal is an understatement,” Rabobank said in a commentary. “Anyway, everything now takes a backseat to the latest incredible twist in this U.S. election campaign.”
A statement issued by Trump’s doctor saying both he and his wife were well and that he would continue his duties appeared to calm the markets’ reaction.
Germany’s DAX gave up 0.6% to 12,649.29 and the CAC 40 in Paris lost 0.6% to 4,796.97. Britain’s FTSE 100 slipped 0.5% to 5,850.86.
Trading in Asia was thin, with markets in Shanghai and Hong Kong closed. The Nikkei 225 index shed strong early gains, losing 0.7% to 23,029.90 after the Tokyo Stock Exchange resumed trading following an all day outage due to a technical failure.
Reports that the Japanese government is preparing new stimulus measures to help the economy recover from a prolonged downturn worsened by the coronavirus pandemic provided only a temporary lift. Prices fell further after Trump’s announcement.
Australia’s benchmark S&P/ASX 200 slipped 1.4% to 5,791.50. Shares in Singapore, Thailand and Indonesia also fell.
On Thursday, the benchmark S&P 500 ended the day 0.5% higher, at 3,380.80, the Dow Jones Industrial Average rose 0.1% to 27,816.90 and the Nasdaq composite rose 1.4% to 11,326.51, as big tech-oriented stocks propped up the market, much as they have through the pandemic.
Such big swings have become routine as investors assess chances of a deal on Capitol Hill to send more cash to Americans, restore jobless benefits for laid-off workers and deliver assistance to airlines and other industries hit particularly hard by the pandemic.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued their talks on Thursday, but no breakthrough arrived before stock trading ended on Wall Street. Instead, there were only hopes that were periodically raised and dashed as government officials took turns criticizing each other.
“Things remain fluid; we all know what is at stake if this deal does not go through before markets sundown, it is unlikely to be pretty ugly,” Stephen Innes of Axi said in a commentary.
Beyond potential political developments, investors will be watching for job figures due out Friday. Data released Thursday painted a mixed picture for the economy, with one report showing the number of workers filing for unemployment benefits last week fell to 837,000 from 873,000. That was less than economists expected, but incredibly high compared with before the pandemic.
With airlines and other major companies announcing layoffs and furloughs, another round of economic aid from Congress is seen as crucial. Treasury Secretary Stephen Mnuchin and House Speaker Nancy Pelosi have worked effectively together in the past, helping to drive through the previous economic rescue approved by Congress in March. But the country’s deepening partisan divide has stymied progress, with the presidential election only about a month away.
The yield on the 10-year Treasury was steady at 0.67%.
U.S. benchmark crude lost $1.12 to $37.60 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.50 to $38.72 on Thursday. Brent crude, the international standard, lost $1.20 to $39.73 per barrel.
The dollar weakened to 105.21 Japanese yen from 105.54 yen. The euro weakened to $1.1724 from $1.1747.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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