Trump’s positive COVID test adds more uncertainty to volatile markets
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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
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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