Trump is infected by corona - what now?

Trump Tweets Infection

This morning Trump announced on Twitter that his wife and he tested positive for Corona. They have entered quarantine and are continuing their business from there for the time being. The market reacted promptly negatively to the new uncertainty. It will now have to find its footing and price in this new variable, as a serious illness so shortly before the election would of course have massive impacts on the candidates' chances of winning.

The recovery announced for this week will therefore probably end for now, until the market decides what this new situation means. In contrast to many other news items, this is actually an unforeseeable surprise and therefore market-moving. Even the betting providers have temporarily suspended the option to bet on the next president until they have calculated the new odds and gathered more information.

Possible Scenarios

Meanwhile, theories are circulating on social media. Whether, for example, Trump is faking the infection in order to run through the election campaign as a strong Corona conqueror. It remains exciting. In our assessment, the variables are too diverse to make a helpful forecast about the direction. First, there is the question of whether the infection is actually accurate. On the one hand, tests can deliver false positive results. On the other hand, the announcement could actually be tactical in order to be able to appear as a Corona conqueror for the election. An absurd notion in itself, but when it comes to Trump and fake news, one can hardly disregard possibilities on the grounds of absurdity.

The more likely case, however, is that the American president became infected at the height of the election campaign. Now the question is how the disease will progress. An asymptomatic course would in turn give Trump the opportunity to present personal strength, downplay the severity of the epidemic, and generally legitimize his crisis management to date, consisting of as little intervention as possible. This would significantly increase the chances of re-election. A severe course, however, would completely take him out of the race during this critical phase and makes re-election seem hardly possible. Last but not least, there is the question of what a re-election of Trump or an election of Biden would mean for the market. This too is not a simple question; Trump is pro-business but acts in an unsettling manner, while Biden, one should assume, will act more stably and calculatedly, but as a Democrat will and can take significantly less consideration of business preferences.

Conclusion

Given these many and interconnected uncertainties, the only option really is to reduce exposure, take out risk, and wait to see how the situation develops, in order to then make new decisions on a solid basis.