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How will Donald Trump's positive coronavirus affect markets?



How will markets affect the positive for Donald Trump's coronavirus? It is one of the big questions that managers ask themselves in the face of the presidential elections on November 3. The first evaluations indicate that the main beneficiary will be Joe Biden, his Democratic rival, but other managers do not see it so clearly.

Trump have been transferred to a military hospital with mild symptoms. Does it mean that your chances of re-election have decreased? Does your positive result belie your repeated claim that the virus is under control, again undermining your chances of staying in the White House?

On the contrary, does a Fast recovery would he increase his chances of victory, as it would highlight his strength, in contrast to his opponent Biden, somewhat insipid? "After all, such a development would allow the president to claim that the democrats have been too alarmist regarding the virus and that the economy would be unnecessarily ruined in his hands. "

These are some of the rhetorical questions and reflections that the experts of RaboBank.

For its part, Michael Hewson, chief analyst of CMC Markets, comments that the new situation "opens a big gap in Trump's re-election plans and it could complicate the next 30 days if the president begins to show symptoms, becomes ill and cannot campaign. "

However you look at it, this expert adds, "this will influence events in favor of the Democrats after the debacle of the presidential debate this week, especially since Democrats have an advantage in the polls. "Also, Hewson claims that Trump"he has always been a good campaign candidate and this is a big setback for him".

Another question that arises is a possible worsening of his health, due to his advanced age of 74 years and their overweight. "Trump is in the age and weight category that places him in the higher risk groups, with regard to health, and the market and public discourse "will focus their attention on this matter, they say from RaboBank.

"A mild illness and quick recovery it could eventually be positive for him in undecided states. However, a complication of your health would be harmful", they affirm from Credit Suisse.

On the other hand, the next debate with Joe Biden, which should be held on October 15th, now it is unlikely to happen, and although the US constitution has contingency plans for the president is suddenly incapacitatedThis has never happened so close to an American election before, adding even more uncertainty.

"In the short term, we need see if it is a mild illness and if relevant members of the Administration test positive. The news could have implications for both the elections and the conversations about Phase 4 stimuli", say the analysts of TD Securities.

"While it could be argued that the news is unequivocally positive for Biden, we don't think it's that simple. Other world leaders such as Johnson and Bolsanaro obtained a significant increase in your approval ratings after being infected by Covid ", argue these experts.

So the Trump positive leaves many more doubts than certainties in the markets. Precisely that, a increased uncertainty, is the safest for the next few weeks. And uncertainty for the markets is synonymous with greater volatility in the stock markets and more violent movements in the short term.



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