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LONDON / SINGAPORE / TOKYO (Reuters) – Futures for US stocks and European stocks fell on Friday after President Donald Trump said he and his wife had tested positive for the coronavirus.
Futures on the S&P 500
Here are the comments:
QUINCY KROSBY, HEAD OF MARKET STRATEGY, FINANCIAL PRUDENTIAL, NEWARK, NEW JERSEY
“The knee jerk reaction of the market was dramatic. All safe haven assets got the deal you have with those types of holders. But the more information the market gets, especially if the president is on the mend and where the symptoms have been mild, if that’s the report, it should ease the pressure on the market.
“The futures market has relaxed a bit. Okay, the employment data was disappointing, but the condition of the president at this point is more important to the market, especially since we are in the middle of the election season.”
NANNETTE HECHLER-FAYD’HERBE, DIRECTOR OF INVESTMENTS IN INTERNATIONAL WEALTH MANAGEMENT, CREDIT SUISSE, LONDON
“Following the news that US President Donald Trump and First Lady Melania Trump tested positive for COVID-19, financial markets have reacted with a risk reduction measure. Stocks are down, stock volatility has risen and safe haven assets like the Japanese yen Treasuries are well on offer. While this move may reflect initial caution in the face of potential risks around the US president’s health, it is more likely to serve as a wake-up call for financial markets to expect a seasonal re-acceleration in COVID-19 infections around the United States. the economic activity that this may entail. Third quarter developments. Therefore, we expect risk assets and cyclical assets to continue to fluctuate in sync. on the public health situation, news related to vaccines and their respective implications for the economic outlook in the months to come.
JAMES MCDONALD, CEO, HERCULES INVESTMENTS, LOS ANGELES (sent by email)
“The news of President Trump contracting COVID-19 may completely change the direction of the campaign and adds to our already cautious outlook on the stock market.” President Trump will contract the coronavirus will raise the preparation of institutional money for a Democratic White House and all taxes. , the commercial and budgetary implications that accompany it. We expect institutional investors to begin reducing portfolio risk and increasing hedging in preparation for market volatility. “We are not changing our investment strategy if President Trump contracts the coronavirus and, in fact, forces us to redouble our strategy. We have There has been a long volatility due to the overvaluation of the market, the absence of fiscal relief from the economic pressure caused due to the coronavirus and the uncertainty ahead of the US presidential elections.
DEREK HALPENNY, HEAD OF RESEARCH, MUFG GLOBAL MARKETS
“What could this news about President Trump mean? Some cables report this as a risk-reducing event, as it raises the possibility of a Biden win and a Democratic win is negative in the stock market. We are not convinced. in that line of reasoning. ”
“First, Trump remains very competitive in key decisive states … and catching COVID is unlikely to alter his support much. In fact, if he recovers quickly, it will influence his line of argument that opening the economy is much more important. “
PAUL DONOVAN, CHIEF ECONOMIST, UBS GLOBAL WEALTH MANAGEMENT
“The news that US President Trump tested positive for COVID-19 should be concerning on a personal level, as it would be for anyone. Markets (being impersonal) will focus on whether this affects the outcome of the elections or health policy. public “.
“Future presidential debates may not happen; they were not considered especially significant. Opponents of the use of masks can revise their views, and the experience of the president can affect US public health policy.”
CHRIS BAILEY, RAYMOND JAMES EUROPEAN STRATEGY
“Naturally, it raises concerns about the impact on the upcoming elections, the way the country works, and the like. This followed the US reporting its biggest jump in new cases in five days, including nearly 20 states reporting increases in a single day. of more than 1,000 infections. “
CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE
“The president of the United States has a disease that kills people. People are lowering their risk because of that.”
“The next point is how far this has come (to the administration), which has big implications for the elections. The worst case scenario is that we could see the elections delayed a bit.
“But it really depends on what we’re talking about. Are we talking about a situation where he gets it and doesn’t show up for debates? Or he gets it and uses it to say, ‘I’ve survived this, me. I’m a fighter, ‘or he dies … we have a lot of questions and not many answers available immediately. “
JULIAN WEE, INVESTMENT STRATEGY, CREDIT SUISSE, SINGAPORE
“The initial market reaction has been negative, but I’m not sure it will last.
Ultimately, once the initial knee-jerk reaction has passed, the market will likely focus on what it could mean for the election. And so far, the narrative has gotten more positive over the last week. Our official base case is for a Democratic Sweep, quite in line with the latest polls. “
KHOON GOH, HEAD OF RESEARCH IN ASIA, ANZ, SINGAPORE
“At this stage, it is too early to say how this may affect the outcome of the elections. The markets have sold out on a knee-jerk reaction to the news, which is understandable.
“The dollar was initially bought, but has since been sold. I imagine that as long as both the president and the first lady appear to be in reasonable condition, these market movements will relax.”
NAOYA OSHIKUBO, SENIOR ECONOMIST, SUMITOMO MITSUI TRUST ASSET MANAGEMENT, TOKYO
“Trump has been behind Biden and clearly has failed to narrow the gap after the first debate, which is the most important of the three debates. I suspect that the markets will lean towards the view that Biden is likely to win the election.”
“What worries me is that he will become even more aggressive against China after contracting the virus himself, because I have the impression that British Prime Minister Boris Johnson has become more anti-China after having COVID-19.
“At the moment, it will be difficult for financial markets to be at risk.
AYAKO SERA, MARKET STRATEGY, SUMITOMO MITSUI TRUST BANK, TOKYO:
“We’re seeing typical risky trading now, but as far as we know, Trump is not seriously ill. It is possible that by the time we get to trading in New York, the markets will have calmed down.”
“If Trump’s symptoms are mild and he recovers quickly, his support could increase, which would be similar to what happened with Brazilian President Jair Bolsonaro.
“However, this damages Trump’s ability to campaign and time is running out before the election.
“Whether it’s Trump or Biden, the biggest problem is uncertainty. As long as we are not certain who will win the election, it is difficult for the markets to really resolve themselves.”
(Compiled by the Global Finance and Markets reporting team)
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