US stocks sink while Trump is positive; the oil falls

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U.S. stocks fell after President Donald Trump said he tested positive for the coronavirus just weeks before the election.The S&P 500 index fell about 1% and the highly technological Nasdaq 100 did even worse, with both indicators also weighed down by a disappointing monthly payroll report in the United States. Stocks edged past their morning lows after House Speaker Nancy Pelosi said she would continue to work to find a compromise with Republicans on a stimulus measure.

Stocks fell in Europe and crude oil fell for a second day. The yen, often seen as a safe haven in times of market stress, edged up amid heightened uncertainty ahead of the November 3 vote.

Traders were already bracing for unrest ahead of the poll and in the months following, and the CBOE volatility index, known as the Wall Street fear gauge, jumped the most in a month on Friday. Still, the market moves were ordered as investors waited to see what came next.

“The markets are obviously going to be thirsty for information on the destination, the next steps, the health of the president,” said Kevin Caron, portfolio manager at Washington Crossing. “The market will have to factor this uncertainty into short-term risk premiums.”

Trump’s diagnosis adds to grim developments around the virus as major cities turn into hotspots again. New York has reported the most new cases since May, while London is reportedly at a “tipping point” with infections continuing to rise. Thousands of job cuts this week have shown how businesses still grapple with the readjustments necessary to survive.

In Europe, the pound won in the news British Prime Minister Boris Johnson will intervene in the Brexit negotiations for the first time since June when he meets with his European counterpart on Saturday.

Investors will also be following news on Trump’s health and the spread of the coronavirus this weekend.

“As long as the government is functioning normally, the markets will be affected, but not necessarily panic,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “However, this incident shows how COVID-19 continues to be a threat to the economy and the markets.”

Here are the main movements in the markets:

Stocks

The S&P 500 Index fell 0.8% at 9:40 a.m. New York time.
The Stoxx Europe 600 index fell 0.2%.
The MSCI Asia Pacific Index fell 0.4 percent.
The MSCI Emerging Markets Index fell 0.1 percent.

Devises

The Bloomberg Dollar Spot Index rose 0.2%.
The euro fell 0.3 percent to US $ 1.1707.
The British pound rose 0.1 percent to US $ 1.2906.
The Japanese yen strengthened 0.2 percent to 105.27 per dollar.

Obligations

The yield on 10-year Treasury bills fell two basis points to 0.66%.
Germany’s 10-year yield fell one basis point to -0.55 percent.
Britain’s 10-year yield fell one basis point to 0.22 percent.

Basic products

West Texas Intermediate crude sank 4.9 percent to US $ 36.81 a barrel.
Gold fell 0.1% to US $ 1,903.65 an ounce.



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