Trump's diagnosis fuels uncertainty for skittish US stock market
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard

Sunday
July 03, 2022

Sign In
Subscribe
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
SUNDAY, JULY 03, 2022
Trump's diagnosis fuels uncertainty for skittish US stock market

World+Biz

April Joyner, Lewis Krauskopf/ Reuters
04 October, 2020, 05:20 pm
Last modified: 04 October, 2020, 07:06 pm

Related News

  • Wall St Week Ahead: Investors brace for pivotal July after dismal first half
  • Bruised stocks find support as growth fears dent commodities
  • At Jan 6 Capitol riot hearing, election officials tell of harassment by Trump supporters
  • City Bank perpetual bond makes stock exchange debut
  • The plot darkens in the latest episode of 6 January hearings

Trump's diagnosis fuels uncertainty for skittish US stock market

Many investors are concerned, however, that a serious decline in Trump’s health less than a month before Americans go to the polls on Nov. 3 could roil a U.S. stock market that recently notched its worst monthly performance since its selloff in March while causing turbulence in other assets.

April Joyner, Lewis Krauskopf/ Reuters
04 October, 2020, 05:20 pm
Last modified: 04 October, 2020, 07:06 pm

 

File Photo: U.S. President Donald Trump disembarks from the Marine One helicopter followed by White House Chief of Staff Mark Meadows as he arrives at Walter Reed National Military Medical Center after the White House announced that he "will be working from the presidential offices at Walter Reed for the next few days" after testing positive for the coronavirus disease (Covid-19), in Bethesda, Maryland, U.S., October 2, 2020. REUTERS/Joshua Roberts
File Photo: U.S. President Donald Trump disembarks from the Marine One helicopter followed by White House Chief of Staff Mark Meadows as he arrives at Walter Reed National Military Medical Center after the White House announced that he "will be working from the presidential offices at Walter Reed for the next few days" after testing positive for the coronavirus disease (Covid-19), in Bethesda, Maryland, U.S., October 2, 2020. REUTERS/Joshua Roberts

Investors are gauging how a potential deterioration in President Donald Trump's health could impact asset prices in coming weeks, as the U.S. leader remains hospitalized after being diagnosed with Covid-19.

So far, markets have been comparatively sanguine: hopes of a breakthrough in talks among U.S. lawmakers on another stimulus package took the edge off a stock market selloff on Friday, with the S&P 500 losing less than 1% and so-called safe-haven assets seeing limited demand. News of Trump's hospitalization at a military medical center outside Washington, where he remained on Saturday, came after trading ended on Friday.

Many investors are concerned, however, that a serious decline in Trump's health less than a month before Americans go to the polls on Nov. 3 could roil a U.S. stock market that recently notched its worst monthly performance since its selloff in March while causing turbulence in other assets.

If the president's health is in jeopardy, there's "too much uncertainty in the situation for the markets just to shrug it off," said Willie Delwiche, investment strategist at Baird.

The various outcomes investors currently envision run the gamut from a quick recovery that bolsters Trump's image as a fighter to a drawn-out illness or death stoking uncertainty and drying up risk appetite across markets.

Should uncertainty persist, technology and momentum stocks that have led this year's rally may be particularly vulnerable to a selloff, some investors said. The tech-heavy Nasdaq fell more than 2% on Friday, double the S&P 500's decline.

"If people ... get nervous right now, probably it manifests itself in crowded trades like tech and mega-cap being unwound a bit," Delwiche said

A record 80% of fund managers surveyed last month by BofA Global Research said that buying technology stocks was the market's "most crowded" trade.

The concentration of investors in big tech stocks has also raised concerns over their outsized sway on moves in the broader market.

The largest five U.S. companies – Google parent Alphabet, Amazon, Apple, Facebook, and Microsoft – now account for almost 25% of the S&P 500's market capitalization, according to research firm Oxford Economics.

Fiscal Stimulus Talks

Trump's diagnosis has intensified the spotlight on the fiscal stimulus talks in Washington, with investors saying agreement on another aid package could act as a stabilizing force on markets in the face of election-related uncertainty.

U.S. House of Representatives Speaker Nancy Pelosi, a Democrat, said on Friday that negotiations were continuing, but she is waiting for a response from the White House on key areas.

Fresh stimulus could speed economic healing from the impact of the pandemic, which has put millions of Americans out of work, and benefit economically-sensitive companies whose stock performance has lagged this year, investors said.

For those who are underweight stocks, "we would be using this volatility as an opportunity to increase equities because we think we're in an early-stage economic recovery," said Keith Lerner, chief market strategist at Truist/SunTrust Advisory.

Market action on Friday suggested some investors may have been positioning for a stimulus announcement in the midst of the selloff.

The S&P 500 sectors representing industrials and financials, two groups that are more sensitive to a broad economic recovery, rallied 1.1% and 0.7%, respectively, while the broader index declined.

Even with worries over Trump's condition, "the fiscal program has been the loudest noise in the market," said Arnim Holzer, macro and correlation defense strategist at EAB Investment Group.

Investor hedges against election-related market swings put in place over the last few months may have softened Friday's decline and could, to a degree, mitigate future volatility, said Christopher Stanton of hedge fund Sunrise Capital Partners LLC.

Despite Trump's illness, futures on the Cboe Volatility Index continued to show expectations of elevated volatility after the Nov. 3 vote, a pattern consistent with concerns of a contested election.

Nagging doubts over whether the Republican president would agree to hand over the keys to the White House if he loses have grown in recent weeks. During his first debate with Democratic challenger Joe Biden on Tuesday, Trump declined to commit to accepting the results, repeating his unfounded complaint that mail-in ballots would lead to election fraud.

"If Trump's health does not recover ... then he might give up on contesting the election," said Michael Purves, chief executive of Tallbacken Capital Advisors. But "markets are not shifting off the contested election thing right now."


The article originally appeared on Reuters 

Top News

Trump / Stock / US Stock Market / Covid 19

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Export earnings hit record high $52.08B in FY22
    Export earnings hit record high $52.08B in FY22
  • Remittance inflow down by 15% in FY21-22 
    Remittance inflow down by 15% in FY21-22 
  • Photo of Bangladesh Secretariat/Collected
    Govt stops purchasing new cars for ministries, departments

MOST VIEWED

  • Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Photo: Reuters
    German road traffic agency says 59,000 Tesla vehicles have software glitch
  • Flags of China and Russia are displayed in this illustration picture taken March 24, 2022. REUTERS/Florence Lo/Illustration
    Russian scientist dies two days after arrest for state treason, lawyer says
  • Smoke rises over the remains of a building destroyed by a military strike, as Russia's attack on Ukraine continues, in Lysychansk, Luhansk region, Ukraine June 17, 2022. File Photo: Reuters
    Russia says its forces now have full control of east Ukraine region
  • This image shows rescue workers at the scene of the accident. Photo: The DAWN
    19 die in Pakistan bus crash
  • A vessel is seen sinking after it snapped in two as tropical storm Chaba passed through, according to authorities, in waters off Hong Kong, China on 2 July 2022. Photo: Reuters
    Chance of finding missing crew off Hong Kong 'very slim' after storm, authorities say
  • FILE PHOTO: A man holds the flags of India and the US while people take part in the 35th India Day Parade in New York August 16, 2015. Reuters/Eduardo Munoz/File Photo
    India among top five countries of birth for naturalised US citizens

Related News

  • Wall St Week Ahead: Investors brace for pivotal July after dismal first half
  • Bruised stocks find support as growth fears dent commodities
  • At Jan 6 Capitol riot hearing, election officials tell of harassment by Trump supporters
  • City Bank perpetual bond makes stock exchange debut
  • The plot darkens in the latest episode of 6 January hearings

Features

A Glittery Eid

A Glittery Eid

5h | Mode
Rise’s target customers are people who crave to express themselves through what they wear, and their clothing line is not relegated to any age range.

Level up your Eid game with Rise

5h | Mode
Stefan Dercon, a Professor of Economics at the University of Oxford and former Chief Economist of the Department of International Development (DFID). Illustration: TBS

Renewing the ‘elite bargain’ for Bangladesh’s future growth

8h | Panorama
The eye-catching commuter: Suzuki Gixxer SF 155

The eye-catching commuter: Suzuki Gixxer SF 155

1d | Wheels

More Videos from TBS

Chirkutt performs on Fete de La Music Fest

Chirkutt performs on Fete de La Music Fest

6h | Videos
Madhuri Sanchita's seed ornaments exhibition

Madhuri Sanchita's seed ornaments exhibition

7h | Videos
Bangabandhu Tunnel to change lives of million

Bangabandhu Tunnel to change lives of million

18h | Videos
Sowari Ghat's fresh fish market

Sowari Ghat's fresh fish market

18h | Videos

Most Read

1
Padma Bridge from satellite. Photo: Screengrab
Bangladesh

Padma Bridge from satellite 

2
Meet the man behind 'Azke amar mon balo nei'
Splash

Meet the man behind 'Azke amar mon balo nei'

3
TBS Illustration
Education

Universities may launch online classes again after Eid

4
Photo: TBS
Bangladesh

Motorcycles banned on Padma Bridge 

5
Photo: Collected
Economy

Tech startup ShopUp bags $65m in Series B4 funding

6
World Bank to give Bangladesh $18b IDA loans in next five years
Economy

World Bank to give Bangladesh $18b IDA loans in next five years

EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2022
The Business Standard All rights reserved
Technical Partner: RSI Lab
BENEATH THE SURFACE
Launch operators on various river routes see a steep drop in passengers after the opening of the the Padma Bridge. Photo: TBS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net