U.S. futures tumbled down along with European stocks on Friday, while the dollar soared after President Donald Trump said he had tested positive for the Covid-19.
Trump stated that both he and First Lady Melania Trump had contracted the coronavirus. They will now quarantine themselves. This news adds to uncertainty in the runup to the U.S. presidential elections next month. As a result, the S&P 500 futures plummeted down as much as 2%, though they recovered some of the drops as traders reassessed both candidates’ chances. The Japanese yen and Treasuries, often seen as safe-havens in times of market stress, surged forward. On the other hand, Crude oil extended losses.
Futures on the S&P 500 Index dropped by 1.6% today. Meanwhile, the Stoxx Europe 600 Index tumbled down by 0.6%. The MSCI Asia Pacific Index also declined by 0.3%, and the MSCI Emerging Market Index lowered by 0.1%.
Trump postponed his campaign for at least ten days
U.S. President has already canceled all public events, among them a rally in Florida. He could be off the campaign trail for at least ten days under normal Covid-19 protocols. Trump is trying to gain ground on Joe Biden, who is holding about a 7 percentage-point lead nationally, according to polls. However, he is forced to postpone his campaign now.
Karen Ward, the chief market strategist for EMEA at J.P. Morgan Asset Management, noted that market sentiment was already delicately balanced ahead of the November election. This news adds to the uncertainty. Nonetheless, it’s too soon to ascertain what the final market direction will be with such a wide range of outcomes and implications stemming from the U.S. President’s diagnosis.
Meanwhile, the House of Representatives passed a $2.2 trillion Democrat-only stimulus package, but Republicans rejected it. Investors’ hopes of further fiscal measures are fading.
In Europe, Centamin, precious metals miner, collapsed by 20% after reducing its 2020 production guidance. The Sterling gained on news U.K. Prime Minister Boris Johnson plans to intervene in the Brexit negotiations for the first time since June.