When I stated last week that we hadn’t seen the end of the 2020 chaos, the end of the uncertainly, I certainty didn’t see this curveball coming.
Dominating the news headlines today is the fact that President Trumps and the First Lady have tested positive for COVID-19, shortly after news broke that Hope Hicks, one of the Presidents close aides contracted the virus.
In true Trump fashion, the President took to twitter to break the story;
This news has once again upended the already upended and now empty apple cart, as the President’s campaign plans have been halted dead in their tracks, as he is forced to self isolate for the duration of the virus.
Markets Sent Reeling
Unsurprisingly, U.S. markets across the board reacted negatively to the news, moving sharply lower as this information spread across the world.
The DOW dropped by a significant 400 points, while the NASDAQ reacted even more negatively, shedding 200 points, or 1.7% of its value.
Even more severely impacted were the oil markets, which suffered heavy losses upon learning this news.
Brent dropped by a stunning 5.1%, moving to levels not seen since June, while in New York, West Texas Intermediate crude futures plummeted by as much as 5.4%.
Other oil indexes dropped in a similar fashion, moving sharply lower.
This of course is going to be seen as either an overreaction by the markets, or an under reaction depending on how severely President Trump, who is 74 years of age and thus at a heightened level of risk to the coronavirus, reacts in the coming days.
If President Trump’s health takes a turn for the worse and is hospitalized, similar to how the leader of the United Kingdom, Boris Johnson was, then you can expect what we are seeing now occur in the markets amplified by an untold magnitude greater.
President Trump is Deemed As the Pro Business Candidate
The fact that this news has moved the markets so significantly tells you all that you need to know about the general, broad sentiment of market participants.
President Trump is viewed as the “pro business” candidate and thus, better for the markets as a whole.
Besides the efforts that the President has made over the last number of years that he has been in office, with his “America” first agenda influencing the majority of his decisions in regards to international trade, there remains the stark reality that President Trump wishes to keep the economy open, while Joe Biden has suggested that further lockdowns are required.
Wall Street by no means wants the latter and unsurprisingly wishes to see the markets remain open, no matter the ramifications.
This is even further highlighted by today’s unemployment numbers, which plunged below 8%, as approximately 661K jobs were added, showing that the economy, under President Trump is on track for recovery.
Whether or not you personally agree, or disagree with eithers Joe Biden’s, or Presidents Trump’s course of action matters little, as the markets have spoken through this move and are clearly worried about how this news is going to affect the rapidly approaching elections.
Meanwhile, gold and silver bullion are being bought as safe haven assets and unlike the broader markets, are holding strongly in the face of this news, with gold remaining relatively unchanged and silver moving slightly higher.
Conspiracy Theories and Shameful Comments Run Amuck
Further highlighting just how far the political divide has become between the left and right within the United States is how this news is being digested on social media, with the most toxic of this, as per usual, being represented on twitter.
Supporters of the President have already begun to raise conspiracy theories on whether or not someone close to President Trump was intentionally infected with COVID-19, so then to pass it on to the President.
While others on the right are wondering if “getting” President Trump infected with COVID-19 is simply going to be used as a means of assassinating the President in another manner, only then to blame the infection as the cause of death.
Meanwhile, those who would qualify as being on the radical left have rejoiced in the news, with many taking to social media, wishing the President ill-will, hoping that the infection takes a turn for the worse, killing the President in the process.
Already the President’s previous shown twitter announcement that he and the FLOTUS have contracted COVID-19 is the President’s most shared / liked twitter post of all time and is filled with both support and truly heinous, toxic comments.
We truly do live in interesting times, however maddening and chaotic they may be.
In the coming days we are going to see a new level of uncertainty, with next week’s trading action being filled with extreme volatility, as the markets attempt to digest every morsel of news they can acquire about the Presidents health.
How this will affect the Presidential elections and the remaining two debates is yet to be seen and is anyone’s best guess at this point, however one thing is guaranteed, uncertainty is going to continue to remain supreme.
Stay safe and keep stacking.
- Source, Nathan McDonald via Sprott Money News