In this news, we discuss the Wall Street set for dive, oil slides after Trump gets coronavirus.
LONDON (Reuters) – Wall Street was set to fall sharply on Friday as US President Donald Trump and his wife tested positive for the coronavirus just four weeks before the US election to send investors to the gold, treasury bills and the yen more secure.
Major European exchanges fell 0.5%, after recovering from some of their more severe morning falls .STOXX, but oil fell nearly 5% and futures markets were showing losses of 1.57-2, 3% for Wall Street’s S&P 500 EScv1, Dow 1YMc1 and Nasdaq NQc1. [.N]
Trump said about Twitter he and his wife had tested positive for the coronavirus: “We will immediately begin our quarantine and recovery process,” he said in a late-night tweet, adding that one of his key associates had also contracted the virus.
The MSCI Global Stock Index, which tracks stocks from 49 countries, was down 0.2% but still on track for a 2% rise for the week which will be its best in more than a month .MIWD00000PUS.
Markets had more grim news to digest with weaker-than-expected monthly US employment data, but Trump’s exposure could spark another wave of market volatility if it appears to disrupt in any way. it is the presidential election, which is only 33 days away.
The duration of risk aversion moves will depend on the extent of the infection at the White House, said François Savary, investment director at Prime Partners, a Swiss wealth manager.
“We may have to wait until the end of the weekend for more clarity on the situation,” he said.
Instant View: Trump Tests Positive for COVID-19; global stocks fall
“It will weigh on the market today and early next week, but will not induce a lasting correction if the infection is contained in Trump,” he added.
The United States never delayed a presidential election, even during the Civil War or the Great Depression, and only moved it twice for administrative reasons – both in the first 60 years of the nation’s founding .
As for the stock market shocks, the assassination of President John F. Kennedy on November 22, 1963 saw the S&P 500 plunge nearly 3% and Wall Street closed the New York Stock Exchange at 2:07 p.m. EST. But the losses were limited to one day and the market recovered in two days.
(Graph: decline in futures contracts -)
News from the White House also triggered a rise in the dollar as well as the safe haven Japanese yen, which experienced its biggest jump in more than a month, reaching 104.95 at 0553 GMT JPY = EBS.
Against a currency depletion, the dollar index was up 0.1% on the day at 93.807 at 10:51 a.m. GMT.
The Australian dollar, which serves as a liquid proxy for risk assets, fell 0.5% AUD = D3, although regional tensions mean the Russian ruble was the hardest hit, with a decline of 1.5%.
The German 10-year benchmark bond fell around 2 basis points to -0.543% DE10YT = RR.
Oil fell as Brent crude LCOc1 fell 4.8% to $ 39.02 a barrel extending its losses as the European session advanced. [O/R]
Gold rose 0.2% to $ 1,908.63 an ounce, after peaking 10 days earlier in the XAU = session.
BETS ARE OFF
“Depending on how this situation develops over the weekend, especially if more senior US government officials test positive, gold could be set for an extended rally,” said Jeffrey Halley, senior market analyst at OANDA.
With the situation ahead of the elections now confused, online gambling site Betfair has suspended betting on the outcome of the November 3 vote.
Even before the news of Trump’s infection, markets had been more bearish after Washington’s failure to reach agreement on a fiscal stimulus package to help the US economy recover from the impact of the coronavirus .
The latest round of monthly US unemployment data, the latest before the November 3 election date, showed slower-than-expected job growth in September as the current COVID-19 crisis leaves plenty of people at the risk of being permanently unemployed.
Non-farm payrolls increased by 661,000 jobs after rising 1.489 million in August. Economists polled by Reuters had forecast an increase of 850,000 jobs.
“The recovery continues, but at a slower pace, in part because government stimulus has declined significantly,” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles .
“We’re seeing more layoffs and bankruptcies, and until the next government comes in with more support, I wouldn’t be surprised to see a further decline in employment towards the end of the year.
Elizabeth Howcroft Report; additional reporting by Rachel Armstrong; Editing by Tomasz Janowski and David Evans
Original © Thomson Reuters
Originally posted 2020-10-03 01:06:12.