Markets tumble after Trump infection – NRK Norway – Summary of news from different parts of the country

The Oslo Stock Exchange opened in the red after President Donald Trump’s positive corona test marked the world’s financial markets for several hours.

Parts of the slide quickly recovered, with the main index on the Oslo Stock Exchange falling 0.5 percent as of 2 p.m.

Market movements on Friday are no greater than what can happen on a normal trading day.

– Market reactions are moderate. This increases the risk that the United States will get into political trouble, but the market will not be affected by this, Sparebank 1 Markets chief economist Harald Magnus Andreassen tells NRK.

Europe’s major indices are also taking the news in stride on Friday:

• The German Dax index is down 0.7 percent.
• The French Cac40 index is down 0.4 percent.
• The London FTSE100 index is down 0.9 percent.

Expect big drops in the US.

The market reaction was only visible in the Asian stock indices last night. The Japanese Nikkei index went from rising to falling on the news and immediately fell one percentage point.

The US stock exchanges will not open until this afternoon Norwegian time. In pre-trade, which can give an indication of how investors are positioning themselves on the news, the drop will increase beyond Friday.

The Nasdaq Technology Index is down more than 2 percent in pre-trade, while the other leading indices, such as the Dow Jones Industrial Average, are down about 1.5 percent.

– The indices are indicated downwards. This means that when the stock markets open, the US stock market will fall more than the Oslo Stock Exchange. A drop of 1.6 percent has been indicated. It’s a pretty big drop in this kind of news, portfolio manager Olav Chen at Storebrand tells NRK.

In the United States, the figures also come from the labor market before the stock market was opened, showing that 661,000 jobs were created outside of agriculture in September, according to the United States Department of Labor. Employment was somewhat lower than analysts expected, according to Marketwatch.

The employment figures are considered the “most important figures of the month” in the market, and they raise the indexes in the pre-trade somewhat.

– Depending on how sick you get

This fall, financial markets are more turbulent than normal due to uncertainty about how increased krone transmission around the world will further affect growth in the largest economies, according to Handelsbanken’s chief economist Kari Due-Andresen. .

– Market players are enthusiastic about what you have to say about the US president. This adds up to an otherwise edgy picture, and if everything else stays the same, it could drag down, he tells NRK.

Andreassen believes that the financial markets are now waiting for the president’s health condition to develop and that reactions may increase over time.

– Of course it depends on how sick you get. He is a 74-year-old man and overweight, so it is clear that he is in a vulnerable group. It could be a scenario where elections in the US are put in a tough spot if disturbed in any way, he says.

Chen says the negative reaction in the stock market can give an indication of how the markets will react if Biden wins the election.

– Biden is expected to grant a higher tax burden. This is a symptom that historically the politics of Trump and the Republicans have been seen to have a positive effect in the short term, he tells NRK.

The crown falls

The Norwegian krone has weakened just under 0.5% on Friday.

The Norwegian currency is small in a global context and, as a general rule, the krone weakens due to falling oil prices and greater uncertainty in the world economy in favor of larger currencies such as the euro and the dollar.

– Simply put, it can be said that most financial investors are based in the United States and are dollar-based. When they see that things are more uncertain, they withdraw their investments and investments in their own currency, says Chen in Storebrand.

Oil price below $ 40

The biggest movements affected oil prices. The market responded to the news with a 3 percent drop last night. Like stock indices, parts of the slide have recovered.

A barrel of North Sea oil now costs $ 39.5 a barrel and is down 2 percent today.

-– The price of oil is falling slightly, and that is because the market is down. The Trump case creates less risk, but it is a fairly small effect, Sparebank1 Markets equity analyst Teodor Sveen-Nilsen tells NRK.

For the first time since mid-September, North Sea oil is now trading below $ 40 a barrel.

– What characterizes the market in general is the uncertainty of demand and how it will recover under the crown, says Sveen-Nilsen.

Bjarne Schieldrop, chief commodities analyst at Skandinaviska Enskilda Banken (SEB), notes that oil prices have fallen from $ 46-47 a barrel in August to around $ 40 a barrel in late September / October because demand for oil has fallen less than expected.

– We are just below the 40 mark. Today’s market fears that we will go down to $ 30 a barrel, he says, continuing:

– Then comes the big news that Trump has covid19. It does not affect the spot price in the market, but we see that it may be the nail in the coffin for his re-election. Right after the television debate earlier this week, Trump’s odds of winning fell and Biden’s increased. With Covid-19 at the top, it is terribly difficult for him to take the campaign to the finals in November.

Schieldrop believes that the news of Trump tonight can be seen as an increase in the probability that Joe Biden will win the presidential election.

The latter believes that it can lower the price of oil in the long term. The reason is that Biden, as vice president of President Barack Obama, struck a nuclear energy deal and eased sanctions against oil producer Iran.

– With Biden at the helm, we will likely get Iranian oil on the market next year, he says.