When President Trump announced his and his wife's positive test results for the Coronavirus, the stock market did take a hit. The Dow Jones Industrial Average and the S&P 500 both decreased by 0.7% while the Nasdaq Composite fell by 1.0%. However, the effect of this event isn't hitting as hard as some may think. In April, the end of the Coronavirus Crash, these same indexes fell between 25% and 29.1% since the start of the crash in February. So why didn't President Trump's announcement affect the market more than it did? To say the least, 2020 has been a very volatile year for the market. With the upcoming election next month, markets were already expected to change. That being said, President Trump did add some uncertainty to the market; however, he added it to a market that was already filled with uncertainty. Therefore, the market didn't fluctuate as much as some would expect.
https://www.marketwatch.com/story/these-us-stocks-fell-the-most-april-1-after-trump-turned-grim-on-coronavirus-forecast-2020-04-01
https://www.barrons.com/articles/president-donald-trump-has-covid-why-the-stock-market-is-dropping-51601638339
I think at this point, investors and the American public in general are no longer shocked or fazed by events like this. I think there was a slight, initial reaction but then business returned as usual. Or as usual as things can be in a time like this. However, who can say what will happen if Trump's condition worsens or he recovers quickly.
ReplyDeleteIs it possible that, given so-called election forecasts, markets are simply betting on a Biden presidency? Or at least an election with undisputed results, in which post-election chaos is minimal? Perhaps one of these predictions eases the medium-term worries of investors. Either way, it seems like markets are sobering up in general: they are either preparing for a less chaotic presidency or four more years of weekly surprises that traders have gradually learned to be prudent enough not to react to.
ReplyDeleteI agree with you spencer, I think that thanks to the forecast people are betting Biden is going to win. with people betting on Biden to win i think it definitely minimizes any thing that happens post election
ReplyDeleteI think that with the world having much more knowledge about covid-19, cases are unlikely to impact the market as much. States such as Ohio are seeing daily highs in cases, but it is not having the impact on the market like it once did.
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