Natixis IM: Market Flash following from President Trump positive COVID test

Natixis IM: Market Flash following from President Trump positive COVID test

2 oktober 2020

Verenigde Staten
Beursvloer (02)

Following Trump’s positive COVID test, markets are selling off. This should not be a surprise. The big question is about the next phase of fiscal stimulus, and whether this makes it even more difficult to get to a compromise agreement between Democrats and Republicans ahead of the elections. Right now, there remain broad differences between both sides and Trump’s positive test is yet another distraction, potentially lowering the odds of a deal. This states Esty Dwek, Head of Global Market Strategy Natixis Investment Managers Solutions.

'That said, recent economic data has been showing the need for the CARES Act 2 and we should not underestimate how many Senators or House Representatives would like to be able to campaign with additional stimulus. So a positive surprise cannot be excluded, even if it might have become tougher to achieve. In the meantime, markets are likely to remain under pressure.'

She continues: 'In terms of the election, I think it is too early to say if it will affect the election. It will really depend on how ill (or not) President Trump gets. If he does not develop symptoms, it likely does not make a difference. If he does, it can impact his campaign and messaging. However, both candidates are so far apart, few are likely to change sides based on this diagnosis.'

Dwek ends her remarks with: 'We are not changing our positioning at this point. We were anticipating a bumpy ride into the elections, and this is yet another factor towards this, but it does not change our medium term constructive outlook.'

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