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The case is being updated.
Markets immediately reacted negatively to the news that US President Donald Trump is infected with the crown.
The Oslo Stock Exchange opened just over one percent lower, and the crown weakened noticeably. But before long it already looks a little brighter.
– It probably shouldn’t fall that much. I think this is very temporary. You can imagine the chaos if the president gets really sick, but with the way Trump rules, we would have expected chaos anyway, Nordea Life chief investment officer Leif-Rune Rein tells E24 right after the opening. of the stock market.
– We have seen several times recently that various things have created small setbacks, but it happens after the stock markets have risen a lot and especially the big TI stocks have been traded rigidly, he adds.
– It is not positive for Trump
Nordea’s director notes that most people in the market believe that Biden will win, and that he clearly leads the polls, even though they have misinterpreted the result before.
– I do not think that Biden’s victory will lead to a fall in the markets, on the contrary. Rather, the market will focus on a few safe hands behind the wheel, despite potential tax increases. Stability is the most important thing for the market, he says.
However, Rein notes that the infection of Trump’s crown creates an entirely new kind of uncertainty, which can destroy the focus and dynamics of the election campaign and possibly lead to canceled debates.
– Corona has been Trump’s Achilles heel, so it’s hard to see how this can have a positive effect. I do not imagine the great sympathy, and now at least he did not deny the crown pandemic.
– This probably hits the market side fast, but does not strengthen your chances.
The first reaction is more uncertainty.
– The immediate first reaction is more uncertainty and gives a negative risk picture, DNB Markets equity strategist Paul Harper told E24 before the stock market opened.
– The more serious the disease becomes, the greater the effect it can have. The question is whether he will be completely baffled in the run-up to the election campaign or whether he can still sit in the office and get a lot of attention, he adds.
At present, we know little about the actual state of health of Trump, who is 74 years old and therefore in the risk group for crown-related complications. However, First Lady Melania Trump says on Twitter that they feel good, but have postponed future engagements.
– So far, we have not received any indication of Trump’s health other than that he tested positive, but if he gets really bad and has to be hospitalized then it will be something else entirely. To some extent, this can also generate sympathy for him.
– Worst for US Stock Exchanges
Harper believes the situation will be worse for US stocks.
– I would assume that to the extent that market prices are somewhat less likely that Trump will win they will be more negative for US stocks, in the sense that Biden intends to increase tax rates on companies and tighten regulation, He says.
– Probably not so bad for European stocks. Biden is also less interested in continuing the trade war with the EU, so in that sense he could be more positive for Europe if he wins.
Therefore, the strategist believes that the effects on European equities will not necessarily be as great as in the United States, although the news will generally affect the appetite for risk in the first instance.
Before the opening of the stock market in Oslo, there was a drop of close to two percent, according to Harper, which was based on the sharp drop (first contracts on the stock exchange) in the United States after the announcement.
Provides uncertainty around the final sprint.
With just one month to go, Harper notes that uncertainty around the final sprint is also increasing.
– The infection may limit Trump’s ability to continue the election campaign as planned. Perhaps you are also more reliant on personal assistance to lift your mood, so it can have a negative effect in that you are slightly less likely to be chosen, he says.
– It can also open the door for upcoming debates to be canceled, and then perhaps one of Trump’s best hopes is that Biden stumbles over some roadblocks and says something stupid comes down.
The next presidential debate is scheduled for October 15.
The dollar is getting stronger
The dollar also strengthens significantly on the twig in the morning. As market uncertainty mounts, investors are fleeing to safe major currencies like the dollar, even though the uncertainty is now coming from the US.
Small coins like the Norwegian krone bear the brunt. At most, the krona weakened around 13 øre from the same time yesterday, making a dollar cost 9.40 kroner. During the morning, the crown returns slightly and at the time of writing, it is observed at 9.33.
The price of oil, which has also fallen in the morning, also contributes to the weakening of the krone.
What the infection of Trump’s crown will have to say about the currency market going forward, there are currently no clear expectations among analysts, according to Reuters.
– What this shows is that the risk of virus infection is still quite real. The infection rate is no longer dropping. “This reminds people that the virus still exists,” Bank of Singapore currency analyst Moh Siong Sim told Reuters.
