President Trump and FLOTUS Test Positive For COVID
Updated: Oct 16, 2020
Trump tweeted just after 9pm on October 1st that he and his wife have contracted the virus. Investors were expecting a shock this morning, as usually such momentous news would spur unrest and uncertainty, almost guaranteeing the markets would fall today. Yet the market's performance today was nothing out of the ordinary. The S&P 500, the universal gauge of the stock markets, is only down about 0.4% today. This is fairly standard fluctuation day-to-day.
The rest of October and early November are going to be even more volatile with this news. As the markets weigh the growing probability of Biden becoming President, market fluctuations will become far larger. After the election, if Biden wins we can expect a large shift in asset allocation causing industries such as fossil fuel, defense, and health care to fall significantly.
These declines are expected to occur due to the premise of Biden enacting new policies. These new policies will entice investors to look for opportunities elsewhere, as increased regulation in any particular industry usually leads to an increase in company expenses and a decrease in profits. Investors recognize there is greener grass in a different industry, so they'll go invest elsewhere.
Trump contracting COVID could have dire consequences, including the death of a sitting President. In contrast, if Trump recovers from the virus and publicly announces it isn't a big deal and declares himself tough or masculine for beating the virus, it will perpetuate his base's current sentiment of not taking the virus seriously.
The virus kills. Hopefully it will not kill Trump, but also hopefully this will instill an impactful warning to Americans who continue to not social distance or wear a mask.