European stock markets plummeted on Friday following the news of United States president Donald Trump testing positive for COVID-19 in with just a little over a month before the presidential elections.
Following the reports, all major stock market indexes across Europe plummeted. The shed off in European stocks comes after the drop in Asian stocks, as investors transferred their resources from the purported risky assets. In London during the morning trading session, the FTSE 100 index slid by 0.6 percent to hit 5,486 points while France’s CAC 40 dipped by 2 percent. Furthermore, the Europe-wide Stoxx 600 index lost 0.3 percent following the Trump news.
Futures prices of stock markets plunge
The Dow Jones industrial average futures plummeted by 445 points, which represents a 1.6 percent dip. On the other hand, the S&P 500 futures dropped by 1.7 percent while Nasdaq futures fell by almost 2.3 percent. Trump’s positive COVID-19 result is a disruptive event, which raises concerns regarding the forthcoming democratic event and the United States governance. Following the diagnosis, Trump tweeted:
Stocks in the Asian Pacific region also followed the other stocks in plummeting following. In Japan, the Nikkei 225 declined by 0.7 percent, while in Australia S&P/ASX 200 plunged by 1.4 percent. Further stock markets in the region such as Hong Kong, mainland China, and Korea are usually shut down during public holidays.
The United States stock market was already bearish even before the announcement, as the future of a robust US economic stimulus plan remains clouded with uncertainty, and the news of President Trump’s senior counsel, Hope Hicks having the virus.
What if Trump’s health deteriorates?
Investors are attempting to comprehend the repercussions of the concession by Trump that he and his wife are infected with the virus. In particular, investors are attempting to figure out how the news would affect the forthcoming elections. According to Tommy Lee of Fundstrat Global Advisor through a memo to customers, the reports obscure investors’ perspective towards the elections. Mr. Lee added that if the health condition of Donald Trump deteriorates, concerns would emerge whether the election is delayed or challenged.
As per the White House physician, Trump and his wife Melania are ‘well at this time,” but the age of Trump puts him in extreme risk of the novel virus. The president will have to annul all meetings in the flesh under his schedule, and even maybe the next presidential debate on October 15 during the final month of election campaigns.