Stocks, Oil Prices Extend Losses After Trump Announces His Positive Covid-19 Result

By Staff, Agencies

United States stock futures extended losses on Friday after US President Donald Trump said he and his wife Melania have tested positive for the coronavirus, weeks ahead of the country’s presidential elections.

Futures for the S&P 500 slid 1.21% by early afternoon in Asia, while US Treasury yields also fell as bond prices rose.

The US dollar was also higher, particularly against the British pound, the Australian and New Zealand dollars as investors sought what they consider relatively safe assets.

Trump said on Twitter that he and his wife had been tested for coronavirus after Hope Hicks, a senior adviser who recently travelled with him, tested positive.

He later tweeted that he and the first lady had tested positive: “We will begin our quarantine and recovery process immediately,” he said.

Trump’s positive coronavirus test result could cause a new wave of market volatility as investors brace for the hotly contested presidential election in November.

“It has the potential to reduce Trump’s campaigning ability. He’s got a lot on and it’s an interruption,” said Sean Callow, currency strategist at Westpac in Sydney.

“It also hurts him as far as the whole narrative that it’s really not much to worry about – it puts the COVID crisis itself back front and center.”

Japan’s Nikkei 225 index erased gains and fell 0.69% as the Tokyo Stock Exchange resumed normal trading after its worst-ever outage brought the world’s third-largest equity market to a standstill.

Euro Stoxx 50 futures were up 0.06%, German DAX futures rose 0.03%, but FTSE futures were down by 1.02%.

Markets had been choppy early on Friday after a spate of data, including jobless claims and consumer spending, suggested that the plodding US economic recovery could be losing steam.

Futures for the tech-heavy Nasdaq fell 1.7%. The benchmark 10-year Treasury yield fell to 0.6545%.

China’s stock and bond markets, foreign exchange and commodity futures markets are closed from October 1-8 for the Golden Week holiday. South Korean and Hong Kong markets are also closed on Friday for holidays.

US markets kicked off the fourth quarter by closing higher on Thursday while investors tracked progress in negotiations for additional fiscal stimulus.

The Dow Jones Industrial Average rose 0.13% on Thursday. The S&P 500 gained 0.53% and the Nasdaq Composite added 1.42%.

Global equities have struggled lately following a sharp rebound from a plunge in March that reached a peak in September.

Thousands of job-cuts this week showed how firms are still wrestling with readjustments needed to survive in the pandemic era as virus cases continue to climb.

“The risks to the rally are real,” Joanne Feeney, partner at Advisors Capital Management LLC, said on Bloomberg TV. “What’s very unusual is that there is a lot more near-term risk at the moment than longer term.”