- President Trump's doctors said he could be discharged from the hospital on Monday.
- Stocks are set to rise in response to his improving condition.
- A larger collapse in shares cannot be ruled out if Trump remains in the hospital.
"The president has continued to improve" – the message from President Donald Trump's physician on Sunday, is taken with a grain of salt after the confusion caused on Saturday due to contradicting statements from the White House. However, the announcement that Trump could be discharged on Monday has been making headlines around the world.
Hopes that the president's COVID-19 episode could be short-lived provide some relief for markets, which fell on Friday after Trump tweeted out his positive coronavirus test. The president, 74-years old and overweight, is leading the world's most powerful country and is trailing behind in the polls. The dramatic turn in an already turbulent campaign has shocked the world and investors.
While S&P 500 futures may advance in Asia and in Europe, the move in American equities depends on Trump indeed leaving the Walter Reed hospital and showing up with his usual energy in the White House. There are reasons to doubt that will happen.
Four reasons to doubt the instant hopes
First, the doctors seemed evasive when talking about Trump's lung scans. Has he developed pneumonia? Hopefully, the answer is no, but the lack of transparency is worrying.
Second, Dr. Sean Conley, the president's doctor, finally acknowledged that Trump received oxygen – on Saturday he only insisted that the president is not on oxygen right now. That also casts doubts about his condition. Late on Saturday, Trump released a video of himself from the hospital to lay these concerns to rest. Another spell of oxygen cannot be ruled out.
Third, Trump is receiving significant medications, including dexamethasone, a steroid that the Center for Disease Control (CDC) recommends administering to patients with "severe and critical COVID-19." While medics may be trying to throw everything at Patient Number One, the usage of steroids – which also suppress fever – can be worrying.
Fourth, according to Dr. Conley, days 7-10 are the most critical ones and Trump could only be in days 5-8 – depending on when he was infected. He was initially taken to the hospital on Friday due to an "abundance of precaution" and keeping him a few more days would seem only seem to be the minimum.
Conclusion
Markets tend to get ahead of themselves and could rise in the hopes that Trump leaves the hospital. However, there are reasons to be cautious on the president's condition, and if he stays for a few more days, it would disappoint investors and send stocks down.
More 2020 Elections: How stocks, gold, dollar could move in four scenarios, nightmare one included
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Optimism price could fall as nearly $90 million worth of OP tokens is due flood markets
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.