Futures on U.S. stocks and European stocks tumbled Friday after President Donald Trump announced that he and the first lady tested positive for the coronavirus.
“Tonight, @FLOTUS and I tested positive for COVID-19. We will immediately begin our quarantine and recovery process, “President Trump said Twitter. Dr. Sean Conley, the president’s physician, said Trump and First Lady Melania Trump “are both fine right now.”
Wall Street was aiming for a weaker opening with employment data available. Dow YM00 Futures,
S&P 500 ES00 futures fell by over 300 points,
fell 1.4% and Nasdaq-100 NQ00 futures,
it sank by 2%.
In Europe, the Stoxx Europe 600 SXXP,
fell 0.5%, the German DAX DAX,
the French CAC 40 PX1,
fell about 0.8% and the FTSE 100 UKX,
Trump’s news of a positive test for the coronavirus came hours after news that close senior aide Hope Hicks, who traveled with him this week, had contracted the virus. Trump’s age, 74, places him in a higher risk category for complications. The death toll in the United States is over 200,000.
The news also comes just about a month before the US election and after a controversial debate between Trump and Democratic challenger Joe Biden earlier this week.
“This is potentially a strong market negative. The key question to my mind is that COVID-19 has spread to the top of the US government, including the leadership of the Senate? For example, it has the potential to put an end to any ongoing discussion about fiscal stimulus, ”said Jeffrey Halley, senior market analyst, Asia Pacific Oanda.
House Democrats approved a $ 2.2 trillion economic stimulus plan as talks drag on between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on a coronavirus aid deal.
Halley added that if Trump gets a mild case and recovers, he could revive his campaign and erode Biden’s lead in the polls.
“We will have to watch this development closely today and over the weekend. Markets dislike uncertainty and I expect Trump’s diagnosis to choke non-farm payrolls this afternoon. I will look for stocks to follow the downside with a move to risk hedging. This is gold, the US dollar and US Treasuries, ”Halley added.
Economists surveyed by MarketWatch expect September payrolls to rise by 800,000, down from a gain of 1.371 million in August, in figures expected before Wall Street opens.
Data in Europe showed that euro zone inflation fell for the second consecutive month. In European politics, British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen are expected to speak on Saturday, in a last ditch effort to reach a trade and security agreement. The euro EURUSD,
fell 0.4% against the dollar and the pound GBPUSD,
it was up 0.2% against the greenback.
Elsewhere, oil prices were also down sharply, with November’s CLX20 crude,
down 4% to $ 37.12 a barrel, while GCZ20 gold,
edged lower. The 10-year Treasury BX yield: TMUBMUSD10Y fell to 0.66%.
Oil spills weighed on shares of European oil companies, with BP BP,
down 2.2% and Royal Dutch Shell RDSA,
losing 1.8%. Mineral stocks also contributed to the weaker tone for Europe, with Anglo American AAL,
down by 1.7%.
Centamin CEE shares,
it slipped 15%, down on the Stoxx Europe 600, after the gold mining company cut its production guide following the suspension of operations at its Sukari mine in Egypt.
Shares of construction activities and services of ACS,
increased by 18%, after the French construction group Vinci DG,
made a non-binding offer for the industrial division of its Spanish rival which valued it 5.2 billion euros (6.11 billion dollars).