President Donald Trump announced that he had contacted the coronavirus, and just a few moments of telling this on Twitter, stocks began to crash. The Dow Jones Industrial Average nosedived with 400 points at a point after the announcement, but soon enough, it prevailed and started to show signs of a resurgence by Friday.
Experts agreed that Trump’s diagnosis must be placed into perspective. CEO Jenny Harrington of Gilman Hill Asset Management said that although this is tragic news, it does not change the reality that things are still on the same page, just like where the country was yesterday. Harrington also recalled that if Dr. Scott Gottlieb, Trump’s physician, said that there is a 3.4 percent chance of mortality, there is also a massive 96 percent that the president is doing well. Harrington recommended that they should not depend on one person despite this may be the case.
Meanwhile, TJM Institutional Services director Jim Iuorio said that uncertainty might already be in the market. He explained that this was what they’re looking at in the morning that Trump made the announcement. This reaction is based on how people think about taking risks. He added that people already know that there are risks, as evidenced by the VIX up at 30.
CNBC “Mad Money” host Jim Cramer considered stocks that should regain momentum. The analysts explained that this is the relationship between a V-shaped market battling an L-shaped economy. The market has tech companies that may be experiencing a slight decline now but can still gain traction like semiconductors. Cramer also pointed out that people will likely remain working at home, and business may always be on as usual. He cited stocks that may momentarily go down but can revive much quickly.
Early morning trading showed S&P 500 was at 0.6% while the Dow Jones Industrial Average plunged 116 points, which was 0.4%, and was at 27,700 around 10.07 a.m. EST. after suffering a low of 433 points earlier. Meanwhile, NASDAQ was at 0.9%.
Experts and political analysts say that the market may move depending on some crucial factors as well. First, investors are considering a possible victory of Joe Biden this coming election. Investors foresee this as a period of higher taxes, stricter regulations, and limited profits. All these can damage the stock market.
Analysts are also considering that a win for the Democrats will improve their chances of receiving a stimulus package to boost the economy. It remains to be seen as Election Day is only a few weeks away.