The morning’s news is dominated by Donald and Melania Trump’s positive test for Coronavirus. The initial comment from the White House doctor is that the president is not ill currently. This of course could change and it is hard to trust the views of doctors who have also described the obese septuagenarian as ‘the fittest president ever.’
We can expect some market volatility in response to this but it will probably be short-lived and should not trigger a portfolio response.
We should however note that it could prove indicative of a month of volatility ahead in the run-up to the US election. US shares will likely need the election out of the way (one way or another) to make further progress. We can only imagine the danger Trump presents in this month as he seeks to fights his way out of his increasingly desperate corner.
In terms of the impact of the positive test on the election the risks here are probably for the Democrats. Whilst the immediate reaction will be to suggest this is Trump’s just-deserts for not taking the virus seriously this line of attack could backfire badly on Democrats. Joe Biden (presumably when he wakes up as it is the early hours in America) will need to decide to what extent he should suspend campaigning himself.
He will need to thread a needle here to allow the the obvious criticism of Trump to be felt without actually landing that blow himself.
It is hard to imagine people will miss it either way. Just hours before his diagnosis he tweeted ‘the end of the pandemic is in sight.’
Trump now has 14 days to recover in order to make the second debate. This is crucial for him. With Biden some 7-8 percent ahead it is Trump who needs the disruption of the debates to shake up the race. Certainly without some seriously big rabbit being pulled from beneath Trump’s barnet it would be hard to bet against Biden at this stage.