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COVID-19

Trump’s positive COVID test adds more uncertainty to volatile markets

David Brancaccio, Meredith Garretson, Erika Soderstrom, and Alex Schroeder Oct 2, 2020
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Mandel Ngan/AFP via Getty Images
COVID-19

Trump’s positive COVID test adds more uncertainty to volatile markets

David Brancaccio, Meredith Garretson, Erika Soderstrom, and Alex Schroeder Oct 2, 2020
Heard on:
Mandel Ngan/AFP via Getty Images
HTML EMBED:
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President Donald Trump’s overnight announcement that he, first lady Melania Trump and senior aide Hope Hicks have tested positive for coronavirus is shaking up financial markets. In this situation, the impulse is to sell stocks and buy bonds. In the half-hour after the Trump tweet, the Dow future fell about 450 points.

Michael Hewson, chief market analyst at CMC Markets in London, has been watching market activity, and the following is an edited transcript of his conversation with “Marketplace Morning Report” host David Brancaccio.

David Brancaccio: So the president announces he’s tested positive with his tweet in the middle of the night Washington time. That’s about 6 a.m. London time. What did you see on your screens?

Michael Hewson: Yeah, well, if I could just say, the health of U.S. presidents has always been a hot-button issue for financial markets. You’ve only got to go back to when [Ronald] Reagan got shot, to when George Bush Sr. fell ill at a banquet in Japan. Financial markets fell quite sharply, you know. So this time is no different to previous examples. I think the biggest concern, more than anything else, is the fact that we already had enormous amounts of uncertainty, in any case, and this just merely added to that.

Brancaccio: To say this introduced a note of uncertainty to financial markets doesn’t evoke the fact that there’s already a lot that is confusing and opaque to people trying to make financial decisions.

Hewson: Absolutely. I mean, if you look at the way the markets have been behaving in past three or four weeks, and the fact that people have been talking about an October surprise. Well, it’s no surprise that in October, volatility generally tends to pick up. It tends to happen on a fairly regular basis and has done so over the last 10 years. So when you’ve got Democrat and Republican politicians arguing about whether or not we’re going to get fiscal stimulus, coming off the back of a rather disappointing debate earlier this week, this is really the last thing the president needs at a time when he’s trailing in the polls.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

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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