The weeks leading up to a US presidential election are always troubled times for the stock markets. But this time it is even worse than usual thanks to Trump's corona infection. In addition, the uncertainty this year could continue beyond election day.
Four weeks before the US presidential election, the stock exchanges are heading into troubled waters in view of the corona infection of incumbent Donald Trump. Also in the new week it will be difficult for the Dax to get out of stagnation and to make the jump over the mark of 13,000 points. There is also great unrest on Wall Street.
After the initial shock about Trump's positive corona test result, however, the German benchmark index made up ground again in trading and was only 0.3 percent easier from trading. On a weekly basis, bargain hunters drove up the prices, the Dax made a gain of 1.8 percent. "Beyond Trump's positive corona test, the US will move even more into the focus of the markets in the final quarter of 2020," said Robert Greil, chief strategist at the private bank Merck Finck.
Trump announced on Friday that he and his wife tested positive for the pathogen. The US president has since been taken to a military hospital. This is a precautionary measure, said the US Presidential Office. Because of his age alone, Trump belongs to the risk group. The US is in the middle of the presidential campaign. Stockbrokers assume that the time leading up to the November 3rd election will be characterized by uncertainty.
Little chance for an economic stimulus package
Even after that, there could be a tremendous match, especially since the result may not be available until late when all postal votes are counted. Ordinarily, stocks should benefit from a Republican election victory and come under pressure from a Democratic president because of tax policies, said Mark Dowding, chief investor at BlueBay Asset Management. "But hopes of higher fiscal spending under a Biden presidency, on the other hand, could support markets, while concerns that a tight Trump win will fuel social unrest may be problematic." Only after the election can it be foreseen whether the markets could still end the Corona year 2020 positively.
Stock marketers are also watching with eagle eyes the negotiations on a further stimulus package in the USA and the effects that Trump's positive test may have on them. The Democrats have passed a $ 2.2 trillion aid package in the House of Representatives to cushion the consequences of the Corona crisis. An agreement is not ruled out, but unlikely, said Helaba expert Claudia Windt. "It probably doesn't stand a chance in the Senate, where the Republicans have a majority."
Economic data, on the other hand, are unlikely to provide any impetus in the coming week, and no important data is foreseeable from companies either. Among other things, the final purchasing manager indices, industrial orders as well as production and foreign trade data are on the agenda in Germany. In the USA, purchasing manager and retail data are also presented. "After all, the US economic data also speak for the fourth quarter for – albeit more moderate – growth," said Merck-Finck expert Greil.
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