Skip navigation Scroll to top
Scroll to top

Trump tests positive for COVID-19

02 October 2020


Jonathan Marriott, Chief Investment Officer  

Following the news that President Trump has tested positive for COVID-19, futures on US equities fell about 2%. Most of the Far East markets are closed today so trading is thin and futures are off the low. European markets are opening around 1% down. It is difficult to gauge how markets should react to this news. We would not wish this dreadful disease on anyone and we hope that he makes a full recovery. It will mean that he will have to suspend campaigning and the next presidential debate is unlikely to take place. After the last debate was so chaotic, that will be welcomed by some observers.

The president is apparently asymptomatic at the moment and may not get it badly and recover quickly, but he is overweight and over 70, so at greater risk than younger people.  He has been in close contact with his campaign team and met the Vice President on Tuesday. Contact tracing and testing may reveal more cases in his team in the days to come. At the presidential debate, Joe Biden was well-distanced from the President on stage but we do not know what contact was made off stage. Biden's campaign has been more socially distanced and he has worn a mask frequently (he was mocked for this by Trump during Tuesday's debate). Amy Comey Barrett, Trump's candidate for the Supreme Court, may be part of the contact tracing which could yet delay her nomination.

It may lead to questions as to the timing of the election. There is no precedent for delaying an election and this would require a vote in both houses of Congress. In 1912, when Theodore Roosevelt was shot while campaigning, the two other candidates suspended campaigning while he recovered. Given the bitterness of this election, that seems unlikely unless Biden also has a positive test. The immediate market reaction was that this would be good for the Democratic candidate, but a sympathy vote could work the other way. In other US elections, illness and even death have not delayed elections. A candidate won a seat in the senate despite having died three weeks earlier. It will mean a greater focus on the Vice Presidential candidates and their debate.

As such a high profile case, it may make people more cautious and take the recommended precautions more seriously. This would be a good thing for controlling the virus but in the short term may further slow economic activity. Negotiations over a new US stimulus package continued yesterday between Republicans and Democrats and this may add stimulus to concluding a deal sooner rather than later.

Most US voters had already made up their minds and some have voted already. As a result, this news may have less impact and we would caution against overreacting to this event. We will continue to monitor events as they develop.

Return to Insights

This communication is provided for information purposes only. The information presented herein provides a general update on market conditions and is not intended and should not be construed as an offer, invitation, solicitation or recommendation to buy or sell any specific investment or participate in any investment (or other) strategy. The subject of the communication is not a regulated investment. Past performance is not an indication of future performance and the value of investments and the income derived from them may fluctuate and you may not receive back the amount you originally invest. Although this document has been prepared on the basis of information we believe to be reliable, LGT Vestra LLP gives no representation or warranty in relation to the accuracy or completeness of the information presented herein. The information presented herein does not provide sufficient information on which to make an informed investment decision. No liability is accepted whatsoever by LGT Vestra LLP, employees and associated companies for any direct or consequential loss arising from this document.

LGT Vestra LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom.