Markets roundup: Stocks plunge while gold and yen gain as Trump tests positive for COVID-19

Volatile financial markets have welcomed European traders and investors this morning after the U.S. President Donald Trump and his wife Melania had tested positive for coronavirus and went into quarantine.

Trump tests positive 

Donald Trump confirmed on Twitter that he and his wife Melania are positive on COVID-19 infection.

Trump is 74 years old and is at great risk for Covid-19 because of his age and being overweight. Trump had no serious health issues during his time as a president, however, he hasn’t followed a healthy diet or exercised regularly either. 

Over 200,000 Americans have died from the virus, mostly those at an older age and with pre-existing health conditions. Trump is known for rarely wearing a mask and for mocking others for doing so, particularly Democratic presidential nominee Joe Biden. 

Health experts have said numerous times that wearing face coverings are essential to stop the spread of the deadly virus. Joe Biden has slammed Trump for his bad response to the virus.

Over recent weeks, the president has held several rallies including thousands of people in the run-up to the upcoming election, ignoring warnings from health professionals who have strongly advised against holding events with large crowds. 

Last night, Trump anticipated that the end of the pandemic is near, shortly before the news that his top adviser, Hope Hicks, had tested positive for Covid-19. 

Hicks travelled with Trump on September 29 and 30. The news about Trump testing positive is expected to drastically affect the presidential race. Trump’s new activities schedule has been released today and it doesn’t include his planned trip to Florida. 

On the other hand, Biden is expected to campaign in Michigan today and these are the two swing states that could decide the outcome of the race. 

The president has campaigned regularly across the U.S. in a bid to win the race against Biden, who has been avoiding rallies with large crowds. On the other hand, Trump has praised his campaign rallies with a large number of people, who do not face coverings either or maintain social distance. 

U.S. futures plunge 

Investors raced to lower their stock holdings on Friday following news that Trump is diagnosed with COVID-19 infection. U.S. stock futures fell while their European counterparts opened lower.

“It will weigh on the market today and early next week but will not induce a long-lasting correction if the infection is contained to Trump,” said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.

The U.S. benchmark index S&P 500 futures are trading 1.06% in the red three hours before New York opens for trading. 

Crude oil prices fall

Crude oil prices extended yesterday’s losses to over 4% on Friday on Trump news. Moreover, the fact that there’s still no agreement on the new stimulus bill increased investors’ worries about demand.

Crude oil now trades at $37.01, or 4.01% lower on the day to extend weekly losses. A four-month low is located at $36.15 and it’s seen as the next target for sellers. 

Gold price edges higher

Opposite to crude oil prices, gold spot prices gained this morning to erase overnight losses and trade 0.1% in the green. The yellow metal is now trading above $1,900/oz again.

The intraday resistance line is located at $1,922/oz.

USD/JPY plunges on risk concerns

USD/JPY, a key benchmark index for the overall risk sentiment in Forex, plunged to below $105 on this morning’s news. The EUR also lost against the greenback, but to a lesser degree. As expected, commodity currencies (AUD, NZD, and CAD) all lost against the dollar.

USD/JPY price now trades at $105.12, down 0.36% on the day. The $104.20 mark is a key target for sellers on the downside.

Cryptocurrency market follows stocks lower

The cryptocurrency market fell over 3% today to hit a valuation of $320 billion. A move lower stopped at the 200-DMA near $320 billion as buyers attempt to defend this important level. 

Bitcoin (BTC) price is trading over 2% down on the day as the sellers attempt to force a daily close below the 200-DMA at $10,538. Ethereum (ETH) price is not doing as well as BTC as it is down about 5%.

Summary

Financial markets, with the exception of gold, yen, and dollar, fell on Friday morning after the U.S. President Donald Trump and his wife Melania tested positive for Covid-19 infection.