US President Donald Trump and Vice President Mike Pence make their way to the Rose Garden to speak on COVID-19 testing at the White House in Washington, DC on September 28, 2020.
mandel ngan/Agence France-Presse/Getty Images
U.S. and European equity futures fell sharply on Friday after President Donald Trump announced that he and the first lady have tested positive for coronavirus.
“Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately,” President Trump said on Twitter. First Lady Melania added on Twitter that they were “feeling good.”
U.S. equity futures went from modest to sharper losses on the news. Dow futures YM00,
German DAX DAX,
Trump’s positive coronavirus test came hours after news that close senior aide Hope Hicks, who had been traveling with him this week, had contracted the virus. Trump’s age, 74, puts him in a higher risk category for complications. The death toll in the U.S. stands at over 200,000.
The news also comes only about a month before the U.S. election, and after a contentious debate between Trump and Democratic challenger Joe Biden earlier this week.
“This is potentially a strong market negative. The key issue to my mind is has Covid-19 spread to the upper echelons of the U.S. government including the Senate leadership? It has the potential to bring to a halt any ongoing talks over fiscal stimulus for example,” said Jeffrey Halley, senior market analyst, Asia Pacific OANDA.
House Democrats approved a $ 2.2 trillion economic stimulus plan as talks drag on between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on an coronavirus aid deal.
Halley added that if Trump gets a mild case and recovers it could re-energize his campaign and erode Biden’s lead in the polls
“We will need to watch this development closely over today and the weekend. Markets dislike certainty and I expect Trump’s diagnosis to drown out the nonfarm payrolls this afternoon. I will be looking for equities to track lower with a move into risk hedging. That is gold, the U.S. dollar and US Treasuries,” added Halley.
Economists polled by MarketWatch are expecting a September payrolls rise of 800,000, down from a 1.371 million gain in August in data expected ahead of Wall Street’s open.
Elsewhere oil prices were also dropping sharply, with November crude CLX20,
The yield on the 10-year Treasury TMUBMUSD10Y,
