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“October Shock”: Markets Tumble After Trump Tests Positive For Covid

After going to bed expecting today’s jobs report to be the highlight of the day, shocked traders woke up this morning to the real October shock: the news tweeted by Donald Trump himself at 12:54am ET, that he and the first lady had tested positive for covid after Hope Hicks, a senior advisor who recently traveled with the president, tested positive.

The result was an immediate flush in US equity futures and global markets which saw the Emini tumble to exactly 3,300 before rebounding modestly into the European open.

AS they sold risk assets, investors rush to safe assets such as gold, U.S. Treasuries and the Japanese yen.  European shares also opened sharply lower, although they recovered some losses in early London trading after the initial overnight move. The STOXX 600 was down 0.6% as of 730am ET. The MSCI world equity index was down 0.2%.

“We’re just a month to the election so this news does throw the election campaign into a disarray for the Republican Party,” said Jingyi Pan, market strategist at IG Asia. “Even though Joe Biden is seen as the friendlier choice for Asia and a Trump absence could in some way or another keep that status quo of a Biden lead, generally, a contested election would generate uncertainties across the world and would not bode well for Asia equities as well.”

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