Trump Has COVID. What Could It Mean For The Economy?

WASHINGTON, DC – OCTOBER 01: U.S. President Donald Trump exits the Oval Office and walks to Marine … [+] One on the South Lawn of the White House on October 1, 2020 in Washington, DC. President Trump is traveling to Bedminster, New Jersey on Thursday for a roundtable event with […]

President Donald Trump and First Lady Melania Trump have tested positive for Covid-19, the president announced on Twitter early Friday morning. The news comes after the president’s senior advisor, Hope Hicks, also tested positive for the virus. President Trump is aged 74 and the First Lady is aged 50.

This news has already shaken financial markets. Stock futures—which typically predict the future trend of stock prices—fell across the Dow Jones industrial average, S&P 500 and Nasdaq-100 indexes Friday morning. European stocks on the Stoxx-600 index also traded about 0.8% lower in early morning, U.S. time.

But the day promises to be a volatile one on the markets, and it’s unclear which direction the president’s diagnosis could take the economy. Investors will likely also be watching the latest jobs report from the Bureau of Labor Statistics, set to be released Friday, which will be the last such report before the election.

The week has already brought a host of difficult economic news: layoffs at Disney, furloughs at American Airlines and United Airlines and continued tense coronavirus-related stimulus negotiations in Congress. The House passed the Democrats’ leaner version of the HEROES Act late Thursday night, which could mean a second stimulus is on the way for Americans—but it’s also possible that the bill won’t make it to the Senate floor or that the Senate won’t pass it by Election Day, which is just a month away.

Trump is the most recent world leader to contract Covid-19; both Prime Minister Boris Johnson of Britain and President Jair Bolsonaro of Brazil also tested positive this year and have since recovered. Trump’s health could create uncertainty surrounding the presidential debate schedule and other aspects of the election—spooking investors—but if he is back on the campaign trail after a two-week quarantine the stock market could stabilize on the news.

The president canceled a planned rally at Orlando Sanford International Airport in Florida on Friday, an early indication that quarantine will have an impact on his ability to campaign in person. The First Lady tweeted early Friday that she and the president have “postponed all upcoming engagements.” 

The length of Trump’s recovery will undoubtedly affect the remaining weeks of the campaign and investors’ response to his diagnosis. In the meantime, many Americans are still waiting on coronavirus-related economic relief—and will have to watch Congress’ continued negotiations for clues on when that will come.

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