Transcripts For BLOOMBERG Bloomberg Markets European Open 20240712

1. 5 ct for the s p tumbled and the nasdaq hit harder in a couple of minutes. Treasuries and the yen gain. Money floods into safe hane assets it is a president s positive test acts as a wakeup call for markets. Good morning. Just under an hour away from 60 minutes away from the start of cash and equity trading in europe. We do see drops more than 1 in European Equity Index Futures. We were looking at some positive numbers just an hour ago. Take a look at the u. S. Futures. Down with the nasdaq underperforming. 1. 9 . And dow off anna we see reaction to these stunning headlines that have taken the markets by storm. Gripped the market. Dictating many over the moves that were seeing. Beware many of the markets in asia are closed. What we have open in asia is japan, australia and indonesia. We saw instant negative reaction. Nasdaq futures down by as much as 202 in the initial place where we saw the news breaking. We do see negative riskoff reaction. We see money going into the dollar and coming out of the market and putting money into software and bonds and coming out of oil. Oil prices down by 3. 5 this hour. Back below 40 an a barrel. Lets get to the start of this story, lets get to the health to have president to have United States and the first lady. Donald trump and his wife melania have tested positive for covid19. The u. S. President tweeted that the pair would quarantine immediately. Stocks in equity futures slumped following the announcement as we just discussed. You can see on our screen the tweet that President Trump put out saying we will get through this together. Lets get to our White House Reporter jordan fabian who joins us from washington. Good to get you on the program in the early hours as this story is developing. What do we know about the health to have president at this point . Reporter right now, we know he has tested positive for the virus. The white house has released a memo saying he and the first lady who also tested positive are conventionalsing in the white house. The white house physician said they are both in decent condition right now. Other than that, we dont know much. We dont know if the president is showing symptoms. We reported earlier that his Senior Advisor hope hicks tested positive. She was displaying symptoms. There is possibly a decent sized outbreak here at the white house. Matt what do you think this does to business at the white house . Is the president , you know, asymptomatic and therefore able to work through this . Do they shut down the west wing temporarily . Does everybody else continue to work while the president conventional eses . Conventionalses . Reporter the president has continued working, but has scrapped his travel plans. He is going to try to work behind the scenes. This is going to have a big impact on talks over a new round of stimulus and the travel schedule for campaign. The condition of the support ominee, amy Coney Barrett. Anna we just saw a tweet from mike pence. He is saying his thoughts are the wth. Karen and i send our thoughts and prayers to President Trump and First Lady Melania Trump. We pray for a full and swift recovery. Heart felt words from the Vice President of course, mike pence. This puts him, as we were just discussing, the president seems to be well at the moment and in the first instance, he wants to doing n doing what he is but mike pence would be at the foreif the president had to take time out with this virus. Reporter thats right. Right now the president says he will continue doing his duties but if he were to fall ill enough, that would maybe trigger that happening. The Vice President taking over. Were not at that stage yet. We dont know if we are going to get to that stage but it is a possibility. Matt White House Reporter jordan fabian will be im assuming now up all night. Remember in the u. S. , it is only 2 00 in the morning as this news breaks. Joining us to talk more about this developing story and the Market Reaction is our Senior Editor for markets in new york. John, thanks for joining us. We saw a big drop in markets as soon as this news crossed. How do you explain that . Is it a concern that there will be a change in policy . Is it concern about confidence this morning . Reporter well, the initial reaction is simply shock. In a liquid market. I hate to use one of the oldest clishas in the book which is often very cliches in the book which is unhelpful, one that markets dislike, it ratchets up uncertainty very greatly indeed. Personally i think the fall in s p futures could have been greater. Were still the last time i lowerd my screen, we were than the day on tuesdays trading. Gold up half a percentage point since this move. There is still a lot further that markets could go. One thing that i do think one of the next questions that is being posed by a number of people is the fact that joe biden, who is three years older than President Trump was sharing a stage with him not so long ago. And so his Health Raises an issue. If you look at prediction markets, you can see that the odds of both joe biden and Kamala Harris being elected president next month have doubled in the last hour. So obviously some very profound, rather alarming thoughts are out there. One or two other points i would like to make. Chance of really major relief of lockdown measures has to be much lower now than it was before. With this kind of shocking news ehind it, the impetus in favor of opening the economy has to be very seriously jolted backwards and that is not good for the shortterm outlook for the economy. One other important question is will there be some attempt to create yet another october surprise . We have had more surprises than we wanted in the last two months already. But does this mean a shift towards something on the chinese front in the next few weeks . Is there an attempt to change the subject yet again, which i have seen the chatter among the people i talked about, that is raising an issue as well. Anna plenty of interesting themes as the markets peck up on then when it comes to geopolitics. Everybody will be waiting for the medical bulletins around the health of the president himself and the first lady and lists of people he has been in contact with. How close did he get to all of them. I wonder about the conversations around washington. You said this might mean lockdown restrictions are not lifted any more quickly than anticipated and perhaps we see further lockdown methods introduced. What about the fiscal side of things . Things start to head south very quickly. I wonder if that still exists. Reporter that is a very interesting point. I dont want to be saying anything flippant about a 74yearold man who has just caught covid but if donald trump himself is not involved in any of those negotiations that possibly improves the chances of some kind of a deal being thrashed out and it probably does increase the pressure. Youre right. On republican senators to agree at least something. It becomes much politically harder to say this is not really a problem, that it is a panic, that it is a hoax and so on. Even though it is only one human being, it is the president of the u. S. I expect you may be right. This does increase the chances on the margin that we get some kind of a fiscal deal. We were expecting to have to talk about we have the unemployment thing coming in, in a matter of hours. That will affect that equation as well. It doesnt seem so important now but that is quite an important element of that equation about what will happen to fiscal policy. Anna well look to see whether the jobs number can cut through what were talking about now, what were talking about now, the health to have president of the United States. You mentioned the geopolitics. What were you referring to there . You think perhaps this could be seen as you think there could be some in washington who might like to take the focus off this and take the focus off the virus in general and put the focus it started . He reporter precisely. That is one of the arguments that came up there. China barely came up in the debate, which was a horrible mess. It is one of the themes that the president has great support on from across the country, something which helps his chances of victory if people are thinking about it. It does increase the chances of something aggressive or notable happening on that front there. Another thing yet again to consider, it is only a matter of nths since Boris Johnson was very sick. You never know exactly how political Public Opinion is going to move on this. Ones natural reaction when hearing a 74yearold man has got covid is to feel sympathy for them. Lets see. It is possible this will change politics in ways we still havent thought through yet. Matt as we said earlier, it is 2 00 in the morning where you are. The markets are not going to open for another seven hours. How do you expect this to play out on the new york stock change and the coming week reporter my best guess is it wont be that big of a deal. There have been a series of events in the hours between now and then to give people omething else to grab hold of. The unemployment data which everybody is geared up for. I think youll certainly, it is amazing if you didnt see the vix so sharply. Volatility, i would imagine youll see more of a move towards the more conservative market. Which will then mean greater strength for stocks trading today, or yesterday, im still in the small hours of the morning in new york. In thursdays trading you have very Strong Performance for the fangs again. The large internet stocks which is fundamentally a defensive play and i would imagine you would probably see more of that than you would expect. The theme of being more defensive, to do very much better than others in the foreseeable future. It is a very interesting question. Rather than the stock market is the dollar. Which is appears to be entering into a downdraft. Normally it gains when people are really worried about things going on in the states. Because it is such a safe haven currency. The classic example is back in 2011 when you had the crisis in congress and the standard of gold downgrade, treasuries Credit Rating and the response in the rest of the world was to pour money into treasuries and the dollar even though treasuries have just graded. It will be to see whether the dollar is treated as a safe haven in this situation or whether you see people regarding the yen or gold as more of a safe hane. I there is some concern, think a serious weakening in the dollar. We have seen that in some initial reaction. A serious weakening would show genuine shaking of confidence in the u. S. In a way that we havent seen in many years. Anna interesting point. For the moment the movement into the dollar is in about the. The dollar acting as a haven. The yen more so. There is some movement into the dollar. Gold sold off initially but has made some moves to the upside. Well watch the typical havens with interest. Thank you for your time this morning. Very early in the morning or late for you. Lets get some further reaction from market participants. Dani burger is with us for that. We see the kneejerk reaction. The move into havens is very clear. What caught your eyes . Ive been talking with triggers and strategists all morning. One thing we have to keep in mind is right now were heading towards the end of the Asian Session where volumes are extremely light with so many markets closed on holiday. This is going to make the markets more volatile at this point. We are seeing u. S. Futures heading lower. We have been talking about it this morning. Some of the other Market Reactions are not as extreme. Slight gain. One thing that stood out to me, an analyst at nomura told me there might be some algo buying relating to these headlines. The fast type of investors might be interpreting this. Going forward it is unclear how this is going shake out for both the market and the president ial race given the fact we dont know how severe President Trumps reaction to his positive coronavirus testing will be. Another strongworded commentary from steven innes saying that rumors have been kicking around all morning, now that the cat is out of the bag, im assuming biden moves big in the polls market. From 60 to 90 of a certain democratic presidency, trump is all but toast. This is sort to sentment im hearing. This this is going to shift things in bidens favor. Also saying that this administration is likely to take strong steps early, likely against china. That could create a series of shocks after shock. Volatility will be expensive due to this. Strategists and investors getting themselves ready for if anything more volatility because of this news. Anna, matt . Matt absolutely. Thanks very much for that. Well be hearing reaction from all corners over the globe. Both friends and foes today. We need to keep all of that in mind. Those relationships are so important in the political picture as well. Lets get first word news. We go to laura right in london. Reporter thanks, matt. President trump has tested positive for covid19. He tweeted that he and the first lady both have the virus and will isolate. It is not certain how he contracted the virus but it mes after a close i had a aide, hope hicks contracted the virus. His doctor expects him to continue carrying out his duties. He said the president and first lady will remain at the white house where the medical unit will maintain a individual lant watch. He said they will update on any development. It is unclear how President Trumps diagnosis will impact he campaign. It will make it harder for the president to shift the campaign away from the virus to other topics such as racial unrest across the country. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thanks very much. Our top story, the only story this morning really. President trump and First Lady Melania Trump have both tested positive for coronavirus. Futures have fallen off a cliff after the president made the announcement himself on twitter. His physician at the moment said they are both well. That is good news. Everybody wishes them well. Were joined by mark franklin. We were just talking through with some of our colleagues. Some of the market implications of what were hearing. Your first assessment how this from an investment perspective how this shifts your thinking as we head to government november. Reporter that is a good question. You have to recognize you get a kneejerk reaction in this the spike of volatility. We would take a pause an reflect from what else is going on. We sense a narrowing of the gap the republicans and democrats for the fiscal package that could do a lot to get money to households. Any positive news on that front as an example would help to mitigate some of the fears that have crept into markets this morning. Matt assuming the president recovers from this just fine, he is a member of course of a lot of high risk groups but he is surrounded by the best medical professionals youd hope, in the world. Youd hope he is able to get some sleep at this point. How do you think this affects the election . Does this bring more people to his corner out of crrn for his health or does it concern for his selt or hurt him in terms of his handling of the virus in general . Some of the opinion polls that have been conducted, it has been a long time that the polls have projected they have less confidence in President Trump in than of handling the cries biden. Where they see they have more confidence in President Trump is the handling of the economy. I think that is critical. If there is a tail wind going into the election on november 3 in terms of the economy and jobs and public sentiment, they feel they have buffers, their jobs are more secure than they were six months ago that is a dominant factor when people decide who they are going to vote for. Anna where do you see the avens . Uncertainty would seem to be high. The dollar has been a haven through the pandemic. It was a haven when market ension was in the u. S. Do you still see the dollar playing that role through this . Reporter you have to evolve your thinking. Havens are a way to diversify away from risk assets. Hedge back the risk youre running in portfolios. Government bonds, the yen, the dollar still look like they give you that diversification. Once they are giving you a negative correlation, the size of the move is not enough to compensate for the losses on your equity portfolio. What were looking for is signs of an extreme negative provision. I would concur the dollar looks in shortterm because a large short position has been built up in the dollar particularly against the euro. There is the potential for sprint effect where the dollar naps back. Matt which assets does that affect . Foreign investors are not simply buying green backs. They do it through investments and treasuries and other fixed income. Which assets does that hit the hardest . Obviously the safest way is o target the dollar. You dont want to be exposed to asset classes. Ne classic example is not. The more cyclical commodities such as oil or Industrial Metals will be sensitive to the downside for any slivers safe havens that we have seen. Anna on gold, the kneejerk eaction has reflected the lack of liquidity in other assets, patches of risk aversion. We do see gold making gains now. We expect gold to be a place to ide from this. Gold there are two factors. One is the dollar and hence we saw the snap drop in gold prices. The other is real rates. Basically nominal Government Bond yields mine us the inflation. If you see all other things equal, Inflation Expectations plummet. If they dont fall, that means yields rise. It is a modest term buying the low into Government Bonds. We need to watch that. Gold is interesting as a diversifier in a period of uncertainty that we now have. Matt anna thanks so much for joining us. Mark franklin. Reflect on the investment sivered this. Up next, were 30 minutes away from the open of European Equity markets. Well continue to bring you the latest on the political and Market Reaction to President Trumps positive covid19 test. That news breaking just before 6 00 london time. An hour and a half ago. This is bloomberg. Matt welcome back to the program. Bloomberg markets. This is the european open on a day when we have a singular peevers breaking news that is really drive piece of breaking news that is driving indexes and futures. President trump and his wife melania have both tested positive for the coronavirus. For covid19. As a result, we saw futures dip immediately after the news. Both here and in europe and in the u. S. We have come back a bit. We were looking at drops of more than 1 across ftse, character and dax futures. Cac and dax futures. There has been somewhat of a recovery in terms of u. S. , european futures. U. S. Futures with down as well more than 1 with s p and dax, dow futures not doing as badly as nasdaq futures. They were down almost 2 . Joining us to discuss the latest Market Reaction is our editor heather burke. I wondr to what you attribute this. It is just a lot of uncertainty and markets were shocked. Do you think they will recover in the next few hours given we dont get any worse news on the condition of the president and first lady . Reporter good morning. Markets are down. October surprise. Markets went into full textbook risk aversion. We see some settling down. S p and nasdaq have bounced off the session low but sell the down over 1 . Barring further news, it seems that some of the most volatility is over for now but were definitely looking at a very negative riskoff day heading into the european and u. S. Open. Anna a lot will depend well be hanging on the medical updates we go ahead get in the weeks and days ahead. Were without quite a bit of volume i imagine through session, with some markets being closed. Does that add some complexity in interpreting what ceci in Asian Session is what well see later . Reporter that definitely adds some complexity. As european and u. S. Traders get to their desks and volumes pick up definitely we could see some that could give some more clarity. Basically Global Equities have peak. Led since they hit a there has been a need for more fiscal stimulus as companies from american armies to disney lay off employees. With the jobs report coming in today, fierce of a slowdown in hiring. The news about President Trumps testing positive for coronavirus only adds to the risk off tone that will probably dominate most of the day. Matt how do you think markets read this in term turnovers election . Reporter this as i said earlier s a complete october surprise. The big takeaway now is more volatility going in. We have seen contracts this orning on the cboevolatility index surge about 10 . Definitely the most quickest takeaway going into the election now is the chance for increased olatility. Anna we see a move into havens during these periods of uncertainty, role that gold might play. Has there been anything that surprised you about the way arkets have reacted to this . Reporter early on today, not particularly. Were seeing a classic risk on. Commodity we already have seen some move down in commodities. Copper had tumbled yesterday. The most since march. Crude was down about concerns of oversupply. The risk off tone were seeing is likely to amplify those moves today. Matt thanks very much for joining us. Heather burke there coming to us on this developing story. Just to recap, if youre turning on the television this morning. President trump and his wife the first lady, Melania Trump have both tested positive for covid19. Lets go for an update with ann marie. Who went live just as this news broke. You saw then firsthand from your program how markets were affected. There has been a little bit of a recovery but just give us the basic outline of what happened this morning. Reporter of course what happened this morning is we had the con termation from the president himself on 2013 and then his physician coming out and saying it is confirmed the president of the United States has tested positive for covid19 alongside his wife Melania Trump. We should wish anyone who faces this virus safety and health, especially the first family. The white house spokesperson said that Contact Tracing is underway. Of course they had done that for hope hicks seeing who she came into contact with. We dont know if that is how the president contracted the virus. Thats what many think. She was Onboard Air Force 1 with in the debate and cleveland. He was going to be going to Battle Ground states that his Campaign Sees as crucial for him. Friday, florida, saturday, wisconsin and monday and tuesday, arizona. Let me just quickly run you through polls from the latest new york times. Arizona biden is up four points. Wisconsin biden is up seven points. Florida, biden is up one point. President trump will be quarantining for 14 days likely. This means these rallies are off the table. So there is going to be a lot of reaction in term turnovers politics when you see the east coast start to wake up about what this means for the u. S. President ial election and thus far we have not heard from the biden camp. Anna key to this, crucial to on the arly updates president s health himself and updates from the democrats side. I suspect in the immediate youd expect well wishes to come through. Campaigning from here. Joe biden in his own way was expected to be fairly business over the next few weeks. Reporter this is going to affect both camps. A very good point. Even though we saw mask wearing in cleveland, the President Joe Biden were socially distanced. They were quite close in the same room. This is going to be a concern i imagine for bidens campaign. President trump we know from the 2016 election he does very well at these rallies. The question is who were the he is going to want to take that virtually or if he is just going to postpone that until he can get back on the campaign trail but as you say, it would be very crass ath and not in good form if the Biden Campaign didnt come out and of course wish the president of the United States a safe and healthy recovery but this is going to impact the election. Already dani burger was talking about what analysts were saying. Saying a blue sweep will be underway. Matt thank you very much for joining us. This developing story, the president and the first lady have confirmed they tested positive for covid19. This happened just a couple of hours, instantly we saw equity indexes and equity Index Futures fall. Safe haven assets like treasuries, the dwreand dollar rallying. Joining us now is the head of fx bank america. Let me ask you first off about the safe haven trades. We did see the dollar rally quite a bit as this use crossed. The yen gained ground against he green back. I guess this is a gray swan kind of surprise. Developments have increased from already high levels. The Market Reaction should be expected and there is more to ome. Expect theyen will do better. Demired the euro and the ontext when the markets related to covid, related to the u. S. Elections and the recovery. We saw some adjustment in september. This was very small. T is still very much long. Anna this is what we see in response. What about the hane status at this point . The yen seems to have been more of a haven overnight. Would that be expected or do the mod eths gains in the dollar tell us modest gains in the dollar tells Something Interesting . The dollar has been more esponsive to risk sentiment. Global equities very strong. Now looking forward, reactions are mixed. I think there are better twice express these positions. Shorget euroyen or any currency with respect to the u. S. Dollar. E may see dollaryen weakness. How dollaryen has traded this year. It is not necessarily the best way to matt what do you see happening in terms of correlated assets . If you go in to buy the dollar or the yen, a lot of investors are going to be doing that with other instruments. Where do you think we see the most secondary effects . Markets are likely to suffer. Not as stressed actually. There is room for a squeeze there. Long risks across the board. Quities. , and what o dollar is interesting during the september market correction, not has been given by catapulting us at all. Oncept the u. S. Election is now ht be closing testing positive for covid19 has added tremendous uncertainty. I would expect risk position to be particularly from the community. Anna let me ask you about how markets are going to start to look at the chances of the rival camps in election. How you manage that from an fx perspective . Im looking at a chart that Shows Incredible change in the betting odds around the various candidates. What kind of positioning in markets would you expect this to happen . If the market decides this improvest the chances for joe biden, what would you expect to see fx markets . What is interesting is there fx markets and beyond after the u. S. Elections. F biden is president , higher taxes. This will be negative on the dollar. Trump is elected, he would that would be negative for the dollar. Also there is a big question of a sharp decrease in the u. S. Debt from already high levels. Risks. There is tremendous uncertainty. Support the dollar because of risk off. It is lections, high nt to notes that debt levels. Bottom line, it depends on what after the election. I think it is likely to increase in the months ahead. Matt it has to be said President Trump has wished for a weaker dollar from the getgo. In term turnovers bloomberg dollar index, it is only slightly weaker than it was at the beginning of november in 2016. How much really can a president affect the strength of the dollar . Thehe dollar remains over equilibrium is 117. Ack in march it was 148. We have seen some adjustments. Despite a strong dollar,ette emains the president cannot irectly affect the dollar. It is very interesting. Prub wished for a weak dollar. President trump wished for a strong dollar. And responsible for dollar trength. T affects the trade balance. Risk would be because there is a risk. New leadership may not be seen as the anna really incredible. The questions this latest news throws up. Thanks so much for joining us. Donald trump and his wife melania have tested positive for covid19. The u. S. President tweeted that the pair would quarantine immediately. Stocks in equity futures plummeted. They are both well. Of course we all hang on those kind of updates now around the health of the president of the u. S. Joining us now is our u. S. Politics editor Kathleen Hunter. Ood to get your perspective. The president if he is campaigning in quarantine wont look the same. Do we know, is he going to take full rest . Trying to think back to when Boris Johnson became hill and he was still working at his desk at downing street. Absolutely. I think that is the stage that were in now. The indication from the president s position is that the president will continue to execute his duties as president. He will just do it from the white house. Obviously he has an office there and that is possible to do. It is important to remember he did that consistently in march and april and he didnt leave hardly at all during the early stages of the pandemic in the u. S. That is expected to be a model for that. He has two roles now. His role as president and role in the election. I do think his Campaign Efforts will be affected. Today he canceled all of his public events. It is hard to imagine for at least a couple of weeks that will be the case going forward. Until he has recovered from this. That is going to affect the final stretch of the Campaign Given we are just a month out from election night. Matt a couple of analysts have said this would give an advantage to the Biden Campaign. On the other hand, she is reporting now that predicted has said that trump is now at 36, biden is at 64. Trump is gaining a little bit of ground. Their Approval Ratings rise. Do you think trump gets a sympathy vote because of this or this to ink voters use judge his handling of the coronavirus pandemic . I think there is a couple of things there. Certainly the president has already gotten poor marks for his handling of the coronavirus pandemic. For people that were already critical of the president s handling, this is going to reinforce their that she knows perhaps he has not done enough to contain the spread of the virus nationally and personally. How many of these people were already going to vote for trump . Probably not that many. I think for the nation, i think this is a moment of potential unity and well wishes for the president given that of course nobody wants to see their leader fall ill. I think there is the potential that you know, for what you described as potentially some sort of of a sympathy vote or people pulling together, certainly for Trump Supporters, they will pull together. Of the undecides out there, how many of those it might shift their opinion. It is too early to say on that. Compared to last election, most people had already made up their minds. This may move the needle a bit but hard to say how much and how many people are out there to be swayed at this stage. Anna indeed. Thank you so much. U. S. Politics editor Kathleen Hunter joining us with the latest this top story. Lets get to Juliette Saly in singapore. Reaction to the news the President Trump and the first lady have contracted coronavirus. You thought we had have a quiet day with half the markets closed but then japan coming back from being closed yesterday. How has the markets dealt with these unusual circumstances . We thought we would be talking about the return from that trading hold in tokyo yesterday. Thats what were focusing on in asia. A number of markets closed. China, hong kong, south korea, taiwan. This is the last halfhour of trading in japan and australia. A sharp turn downward. The nikkei had been trading range bound and the volume a little higher than what we were expecting. Trade up by about 40 above the 30day moving average. As you can see, the two main markets that were trading closed lower while you saw a lot of money going into the yen as we would expect. Particularly that move in the aussie general. Aussie yen. We saw huge volatility as you would expect. One week implied volatility for the japanese yen. Youre seeing a lot of the movement coming through in terms of a reaction. Anna . Matt . Matt you have also been pouring through analyst notes to see how this could affect the election or how this could change things in terms of what voters will do in the polls. What are you seeing . So far the majority that have trickled in are saying it would be more positive for the biden camp but we just had one coming through as you were mentioning it could change there in terms of trump getting the sympathy. The spread of the coronavirus is very widespread in the u. S. While meanwhile you have United First Partners in singapore saying that biden will gain from this, particularly if trump goes into i. C. U. That could be a big problem. If the president is asymptomatic, that volatility could contained. The polls could tip widely in avor of biden. He says trump all but toast. Anna joining us now for a look ahead into the European Market open, dani burger. What can we expects . Futures fell along with u. S. Futures. Thats right. You have to imagine the a lot of the concern along the uncertainty is concentrated in the u. S. I have seen some commentary this morning saying i i dont understand why were seeing such a severe selloff in markets, especially European Markets. A lot of this is a gut punch reaction. I was speaking with someone from nomura and he said he thinks a lot of the initial reaction we have seen this morning would be algo trading. A lot of these algoes operate in the european futures space as well. It is very possible that some of the initial pain were seeing is a shock as people are trying tried trend lower and make some money off of that. However there is a possibility once the u. S. Comes back online we see some of the gains reversing and at least on the polling markets we have seen that initial fwoump biden and selling off of trumps possibility of whening start to normalize slightly. You mentioned earlier at one point biden was as high a as 66 , meaning 66 chance of winning the presidency. He has fallen down to 64 . Are we going to see that in the . Earpian market very likely. It is hard to imagine that anything happening in europe can cut through the noise. Despite the fact that it being a very significant week for europe as well between the e. U. Recovery fund and different brexit negotiations. You have to imagine that it would be a large headline to really break through this noise. Overall look for that haven moving higher. Stocks moving lower. Risk assets selling off bleeding its way into the european session. Matt fantastic reporting, dani burger. Thanks very much for that talking about analyst reaction and betting markets and whats happening in the actual markets as well. Well continue to dive through these markets and this Market Reaction for you as President Trump and his wife, the first lady both test positive for covid19. This is bloomberg. Anna welcome back to Bloomberg Markets the european open. Here are your headlines. The u. S. President tests positive for covid19. Donald trump tells twitter followers himself and the first lady have tested positive for the virus. Futures fall off a cliff after the revelation. The s p tumbles more than 1. 5 before recouping some of those losses. European equity futures also slide. Treasuries and the yen gain. Money floods into havens as the president positive test acts as a wakeup call for markets. Matt . Matt take a look at futures now. We had a big drop of below 1 in futures on this news. Theyve come back just a little bit, but still fugitive ftse futures are down 1 and dax are down a10 7 . Hewitt 8 10 of 1 . U. S. Futures also pointed down after the headlines came out. Lets look at the live cash trade on the global macro movers screen. This is a series of risk assets across each column. Interesting to see in terms of forex whats happening in terms of dollar strength. But the far left column, you can see the ftse has already opened. 6 sh trade, down six or. 7 . I will say that as something this surprising comes out, does often take longer for equity indexes to open up. Youve got 1 drops on the cac, the ibex, and the ftse. London areadrid, and trading down more than 1 . It may take a little bit longer this morning for frankfurt to open up the dax. We also typically see the aex out of amsterdam open already at this time. We typically see the ftse mid open at this time. Its now down 1. I 1. 25 . We are seeing drops across the live european trade, as expected. In fact, those drops are bigger than futures indicated. Dani burger joins us with more Market Reaction. Dani, stocks dropping, ftse futures down. We see money flowing into safe havens, dont we . Dani thats right. Youll have to forgive me because i have gmm up. For one specific reason. I want to point out a consistent across asset move. Thats what is happening in russia. A biden win would be negative for the ruble and russian stocks for russian assets because they see a Biden Administration less favorable to putin. While we are seeing a bit of the action, the ruble down against the dollar, russian stocks down nearly 2 as well. If you believe what seb says, that is a negative for russian assets if biden becomes president , you have to imagine some of this pricing is a view of a shift in bidens favor with the news President Trump contracted coronavirus. Were also looking at the yen, one of the biggest foreignexchange moving assets moving up. 5 . Interesting discussion this morning about if you go to a safe haven currency, is it the yen or the dollar . Fore seeing lots of bids the yen underneath the surface, referring this haven currency. Looking preferring this haven preferring this haven currency. There is a line of zero here. Look, its by no means a historical spike. In july, volatility pricing with sooner. These are traders giving themselves for shortterm volatility because it is one week. Perhaps out along the curve people all right about, or people just need to digest this news before they understand whether or not they go in and buy protection. Finally, i want to show you what the polls have been doing. I have real clear politics. You can see earlier, at one point, biden was at 55 , trump at 45 . Now they are at 60 and 40 , respectively. Someone wouldnt be surprised if bidens chances went to 90 . That would be a gigantic jump. Really interesting to see that, at least the initial reaction seems to be one of increasing bidens chances. Well see how long that plays out. The more details to get a good view on how markets will react and where it makes sense to go from havens. Anna dani burger with the latest on how markets are reacting, four minutes into the session, and markets moved to the downside. A pickup ill pick up where dani left off with our next guest. Gary good morning. Markets react very good morning. Markets reacting swiftly amid the health of the president. Investors drawing their own conclusions about what this does to the chances of joe biden in the election. Do you have anything like clear site for november . Or do you just hunker down and wait for more details around the youidents health because simply cant see a way through to november from here . Aest i think its certainly good thing to continue thinking in scenarios. Maysure, the margin, it very well influence the ability of donald trump to continue tc. ,ing rallies, e according to plan, so it is completely intuitive biden is getting intos in terms of news and polling results, as you have entered. But still, it is important to go beyond that because really what the market is looking at is two things, in my view. First of all, what are the chances of a sweet . And from sweep . And from an economic standpoint, looking beyond november results, it is what Economic Policy will be about that is most i mportant for financial markets, for the stock market in particular. The important thing is what indications are for the economy. Because what can happen to donald trump can happen to any economy, and it means we are looking toward this period of the year were probably, just due to the seasonality, we will be seeing more infections of covid going up. And it mary very well may emphasize the rollover of economic momentum. These two things are equally important as the mass of the etc. , that are relevant for the shortterm. Matt i want to ask about a ,weet from the global times from the fallout of this. The global times is a state affiliated Media Organization and he often says things that are obviously in chinas corner, and therefore, in some ways, a foe of the u. S. And president donald trump. This tweet i thought was aggressive. He said President Trump and the first lady have paid the price for his gamble to play down the covid19. The news shows the severity of the u. S. Pandemic situation. It will impose a negative impact on the image of trump and the u. S. , and may also negatively affect his reelection. As i say, youve got to take this with a grain of salt considering his position, who he is and what hes trying to do. But for me, this raises the question, do u. S. China relations get worse . Does this worsen the relationship between beijing and washington . Guest i think that, in both scenarios, whether donald trump or joe biden, there has been a swing towards a harder line across the two parties in the u. S. Towards china. So, the very tense relations that has now been dead looking the last two years between these two countries is probably going to persist, and its just going to go through the ups and downs in much independence of the overall state of the economy in both countries. I mean, if you think about the fallout on the labor market in the United States, it may very well be that protectionism just continues to uphold and therefore these tensions istinue regardless of who in the white house in the future for four years. Anna i wonder what this does to the fiscal stimulus story in the United States. There are different ways to view this. On one hand, looking at the role of President Trump in self himself. Those that have an impact . Also does that have any impact . There are people who prefer not to think about coronavirus. Maybe this does have underlying impact on the u. S. Economy or on equities, and therefore theres an increasing need or argument. I wonder what your thoughts are on the fiscal side and how that changes that calculation in washington. Is probablyt unlikely that before Congress Goes into recess next week that we will have breaking news in terms of the next stimulus package. It may very well be before the third of november, they are being called again, and there might be about. It may very well be this situation opens up more bipartisan, you know, coming closer together from the extreme positions that they have held so far, and also where to focus on the next stimulus. But really, i think what is happening respect to expectations toward a stimulus package is that the likelihood of a sweep election, whereby the two houses, so the senate as well as the house of representatives, moves into the same camp as far as the majority is concerned. Lets assume this is a democrat sweep. But regardless, the sweep would mean, actually, a higher chance of a stimulus package. And probably at the margin, this would be seen as and regarded as a positive. Longerterm, it depends very much whether the sweep goes towards democrats or, at this moment, it seems less likely, if it were to go towards republicans. Because the Economic Policy focus would be very, very different. Reregulation, the that can be expected under yemocrat suite m sweep ma very well counterbalance the positives of the stimulus. Matt all right, thanks so much for joining us. Really appreciate your time on this friday morning amidst such breaking news and such market moves. From quarter Credit Suisse international, great to get your insight amidst such uncertainty. Ill recap what we have learned this morning. President trump and his wife, First Lady Melania Trump, have both tested positive for covid19. The president , his doctors say the two are doing well and the president will continue, for now, to work as usual. Hell be monitored very closely. Lets get more reaction from our bureau chief, craig gordon. Good morning, or i guess good latenight to you. This is a bombshell for markets, of course, and it must be for the white house, which at times, covid19as not taking as seriously as it could have. How do you think voters react to this . , obviously, look the president of United States, whether youre a big fan or not, is resident of the United States and hes facing this Series Health challenge. President of the United States and hes facing this Series Health challenge. I think voters will be sympathetic to that. Its a very odd moment in American Life right now. We still dont know the full implications of this. Donald trumps a very busy guy. Talked to a lot of people. Amy Coney Barrett met with him not so long ago. The Vice President , chief of staff, a lot of people passed through the oval office. Were trying to get around just how many people might be exposed to donald trump. But yeah, it feels like everything is frozen and we have to get more of a handle on what is Trumps Health condition since we dont know many details right now. Anna what is the precedent good morning to you what is the precedent of a president being unable to campaign . Th darkerhappened wi events taking place than this, i suppose, in u. S. History. Is it the norm that in this situation, both sides stop . We havent heard from the democratic campaign, i dont think. Theres a bit of an irony here, in that joe biden has been ultracautious in his approach to the virus and his campaigns approach to the virus. The bloomberg reporters who traveled with joe biden have to be retested tested repeatedly in the president presence of his campaign officials. There is an irony that President Trump, whose care is sized criticized for not taking the virus seriously, contracted it, while joe biden, who went above and beyond, hasnt. Next 244872 the hours, they will be in a state of shock. Nobody wants to hear from the resident or candidate president or candidate from either candidate. Donald trump campaigns from twitter, too, so he will find a way to have his voice heard. Joe biden has a seven point lead. Hes had that lead for several months. Obviously, trump needed to get back on the trail, get his base stirred up again. That is off the table. Its hard not to see this as anything but helpful to joe biden. But for the next foreseeable future, nobody will be talking too much about that as we assess the president s health. Matt except for the fact higher bolsonaro and Boris Johnson, two men, two World Leaders who also didnt take the coronavirus threat as seriously as maybe they could have, and then contracted covid19, and then each saw higher Approval Ratings, cant you take from that the fact that donald trump will at least get a fair amount of sympathy from voters . Donald trump is a highly polarizing figure. There are people who love him, people who hate him. Lets be upfront about that. There is a phenomenon in american politics, we call it, a rally around the flag. People may remember during the gulf war, George H W Bushs Approval Rating was about 92 . George w. Bush is so george 9 11,h, his son, after his Approval Rating spiked. There may be some rallying around him. Im not necessarily saying that. Its hard to overstate how polarizing he is to people who love him and people who hate him kind of hatem. Anyone can have hate him. Anyone can have human sympathy. Donald trump is not a young man. Hes not a particularly healthy man. We dont know where this leads. Theres a moment where politics may be put a little bit on hold. Standing here tonight, i would be surprised if there was a big sympathy factor for donald trump. Hes not a terribly sympathetic figure. Guy. A very combative a lot, well have to wait and see. But i do think the country right now will try to figure out how serious is this . Those leaders got it, came out the other side. Obviously, 200,000 people have died from this here. So, its a very, very serious moment rayna. The white house is saying right now. The way has is saying theyre doing fine white house is saying theyre doing fine. I dont think its going to fundamentally change the politics, which is right now in joe bidens favor. Anna interesting to think about this with the u. K. Experience. That was a very different time in the pandemic, back in april or so. Prime minister Boris Johnsons Approval Rating was up at 68 , now back down to 35 . It was a different phase in the fight of the coronavirus. Really interesting parallel to think about. Craig gordon with the view from washington. Lets get to dani burger. Shes got details of the vi opening upc vic opening up. Dani we knew volatility across currency, the vix opening. October futures with the vix index itself up higher by two percentage points. That means its the biggest gains in volatility index in a month, since september 3 to be exact, and trading at 28. 79. It still has not jumped above 30 . Its the highest level in less than a month. Volatilities moving higher, but by no means is this a catastrophic move to the upside yet. Still, a lot of appetite for hedging, for volatility. Eva tradetalking to and asking him what to people want right now . We have shifted into a higher gear. He says anything you can get a hold of in the volatility space, this is a ticking time bomb situation. That gives you an idea of the sentiment there. He also points out perhaps trump will get some serpas the votes, which we were some sympathy votes, which we were just talking about. Where do you go when there is uncertainty . The vix is certainly a place where we see people flock to. Volatility and to be perpetual tens to be perpetually low tends to be perpetually low. I should remind everyone watching we still havent broken through the 30 handle yet, so yes a positive, but not dramatic yet. Anna dani burger with the latest on volatility. Lets get a bloomberg first word lose news update with laura wright. Laura resident donald trump has tested positive for covid19. He tweeted he and the first lady melania both have the virus and wisely. He is in certain how he contracted the virus isnt certain how he contracted the virus. Expectsident says he President Trump to continue carrying out duties without disruption. He says the president and first lady will remain at the white house, for a medical unit will maintain a vigilant watch. He says he will update on any develop its. Its developments. Its unclear how this will affect the election campaign. This will likely make it harder for the president to shift the campaign away from the virus to other topics, such as racial unrest across the country. Thats the latest. Anna, matt . Thanks very much. President trump will likely take more steps against china to maintain support from his voters following news hes tested positive for covid19. And it could lead to a series of aftershocks in markets. Thats according to norte asset management, sebastian gailey, who joins us on the phone right now. Sebastian, weve seen a number of tweets from Chinese Media that i think are fairly aggressive in terms of condemnation for President Trump. Will this, as well, anger the president . Sebastian you have to put it in context. This is a country which is in expansion, which is china, and the world leader, which is the United States. And its a battle for the top. Its a battle the president has been quite keen on going after, leading to phase one trade deal, which has only partially succeeded. So once faced with this, in a position of weakness, what you want to do is take back control of the narrative. The easiest way is the trade deal is dead, or take measures against china to regain the sense he is in control, that the government is continuing to do its job and he eventually will become the president of the United States. Never underestimate when people right weak positions, action is to become aggressive and come back immediately. This is most likely what he will do. Anna what would you expect him to pick up as his theme of attack on china if that is indeed the direction he moves in . Do you think we go back to trade . Do you think we stick, with cold war topics tech war, finance were, culture were finance war, culture war . Are those things turning hot . Sebastian there are a variety of things he can do. Some of them are efficient, such as cutting dollar assets. Its not something that will capture the imagination. Phase one trade deal will do the job. There are things he can do basically on financials and the like, which are less harmful. He can stagger it. Uppercuts, or he can go for one blow at a time. My suspicion is he will go for one blow and probably consider europe, this is much less likely, the part of his base has shown roots, and that will hit in europe if you go after them. More likely to be steadily focused on china. The question there is whether there is a series of small sharks or average sharks small shocks or average shocks. Matt its not only the trump base. Its not only republicans angry at china about the pandemic, that are suspicious of chinas spy capabilities, that are concerned about the possibility of china influencing the election. Democrats, some democrats also harbor these feelings. What do you think the path is for joe biden against china, should he win power . Sebastian we have to phrase it, but we know, the president tests positive on because of the 19 positive on covid19. Democrats have access to that it. Rmation, or so aware of that leads to being aggressive against china, both for political reasons and strategic reasons. You cant expect a significant shift from one administration to the next. The next might be more aggressive, in some ways. Its not just appealing to the base. Its an issue of the first order. If you allow china to emerge over decades to become prominent, and the promise is if we let you work with us and we send you our factories, you play with us. The reality is they have not. Hence, you have a firstclass conflict between not only the United States and china, but the west. Right now, its mostly the United States. There is no such thing as America First as allies. If democrats do win, it will be the west against china. Difficult situation. Having said that, were bullish on the china regan. Its just up china rebound. Its just the politics will be difficult. Sebastian joining us. Well have plenty more coverage of this breaking news of whats happening with President Trump and milana trump, both of them testing positive for covid19. I want to get to other headlines. Understand there is an appointment in the diary. Is that a positive development . The pound has been on a whipsaw all week by talks of progress, lack of progress, good ,elationship, poor relationship just watching the pound to see if we get instant reaction. We see pound has been down, sold off with other risk assets. Eye on the pound. This is bloomberg. Anna welcome back to the European Market open, 30 minutes into your trading session, and equity markets making losses down around. 5 . The top story is donald and Melania Trump testing positive for covid19, both said to be on good form and generally have good health. Not adversely affected by this positive test, but we will wait to see if hope hicks, one of his close aides, has been displaying symptoms. We will see how the story develops, everybody in the markets hanging on for details. Just to add further newsline into the mix, we see a big spike in the pound coming through right now, the pound raising losses, which we saw in response to earlier headlines around President Trump, the pound down 9. 29 in response, suggesting maybe reason for hope around brexit negotiations because they are going to be meeting saturday. They must think they have enough to talk about to meet this weekend. Dani burger has been looking at the markets in more detail. Dani no one had a game plan for President Trump curve contracting coronavirus. I talked about this earlier, but russian assets continue to move further into the red. Russian equities down nearly 2 , the ruble down 1 , steep billing its losses. Any increased chance of a biden win would be negative for russia because it is less accommodative towards putin. We see havens get a bid, the yen up. 2 versus the dollar. This gain has come off a bit, giving us this idea there was a lot of alico in initial trading and shock is starting to process. Certainly acrosstheboard, risk assets doing worse, brent crude and of uti down more than 2 . Living into the havens and demands for protection, this is the october vix. This is if you want to see what volatility is going to be like getting closer to the election. It did have an initial pop higher, trading at a one month high. It has since come down a bit. When you look at the entirety of the curve, theres a sizable kink around the election. People are saying this is the period i need to be protected for. A lot of that volatility has picked up on the front and. Front end. Now we have uncertainty. All of theirld me clients are demanding havens. In his words, this is now just a ticking time bomb. One of those havens is the. The yen. Heres the one week volatility. As weve been talking about, this isnt a historical move. Its not really very dramatic. 1. 46 . Up to 1546 finally, one of the interesting things to keep an eye on is the betting pulse. How it stands as of yesterday betting polls. How it stands for yesterday, 60 provided, 40 for trump for biden, 40 for trump. He saw this push for biden. Thats starting to come down, normalizing a little. There seems to be a preference if you bet on either candidate, betting markets bidding in for joe biden. Is this got punch reaction . How is this going to shake out throughout the day . Matt and you saw a turnaround. On predicted, biden has been getting 66 , in a drop. Dani what happens is you get the news and the initial bump to 66 , . 66. You get the initial jump higher. A couple hours after the announcement, you have people seeing that moved to biden was overdone. We saw biden drop to . 64, and trump dropped off, as well. Perhaps people looking at it, thinking people make quick money because it was over five in terms of bidens odds. Anna dani burger with the latest on the market response to President Trump and his wife contractin covid19. The eu president saying he wishes President Trump and the first lady a speedy recovery. Covid19 is a battle we fight every day. Thats direct response to the tweet President Trump put out himself. Lets get to Kathleen Hunter. Still waiting for any response from the democratic side, although many in the u. S. Clearly at this point. We are watching betting odds move on this. You have to wonder whether that is some kind of kneejerk reaction or if this is a longerterm assessment of the chances of both sides. Its still think early to say, specifically how it will affect the election. A lot engines hinges on the extent the president becomes ill, how long it takes for him to recover, and other factors we just dont know yet. Of course, this is a seismic event for the election just 30 days out. But i think we will need to see how this plays out over the weekend to really know what political fallout theres going to be. Matt what he think about the response what do you think about the response from china . I thought it was aggressive, blaming donald trump and Melania Trumps Covid Infection on his policies. Relationsworsen the between the u. S. And china . Kathleen i think absolutely. They were already quite tense and not good to begin with. I think in some ways, chinas response, while aggressive, the president spent months referring to this as the china virus, blaming it for the spread to the u. S. I wouldnt say its unexpected. Anna thank you very much. Kathleen hunter on the initial news on the response. We havent had initial chinese response. Joining us now with geopolitical analysis and weighing into the conversation, the director of the u. S. An american program. Leslie, good to speak to you. Take us back to basics and tell us where this leads the election process. The rules, protocols, or just norms we need to be aware of, either the campaigning or the election itself . What do we need to know . Leslie i think first of all, we should say we wish will President Trump well President Trump, his wife, and all of those who have been in close proximity to President Trump. We wish them well. This is a serious concern, especially for Older Americans like the president , who are vulnerable. Remember yesterday, President Trump traveled to new jersey. He participated in a fundraiser. He was endorsed by close supporters. We do hold a lot of concern for the president and those around him. At think this is undoubtedly going to cast a great i think this is undoubtedly going to cast a great deal of uncertainty in the coming weeks. This is the most consequential president ial election this side of the world war. Its difficult to understate how difficult it is to have a president and the white house vulnerable to a pandemic that has killed more than 200,000 americans. We are looking forward to october 7, Vice President ial debate. I think even that will be concerned uncertain. Even at a social distance with the debate, just a week after the president debated Vice President biden and may already have had the test only came through recently. We dont know the other surrounding factors yet. And then october 15, were looking at the next president ial debate, again deep uncertainty, very difficult to imagine that going forward. I think one of the most important things here is that weve had ambivalent, chaotic, and mixed messages coming out of the white house. And this, in a sense, gives it clarity. The pandemic israel. September is real. September is a month they wanted to return to normal. This sends a signal nobody is invulnerable. The president of the United States of america has tested positive for covid. It sends a great deal of clarity to americans, to Trump Supporters that have been unsettled, perhaps taking a cue from the president the pandemic is not serious. It clearly is a series. I think the effect from the campaign are very matt is it fair to say that weve had ambivalent, and really not serious policies concerning the coronavirus in the u. K. , as well . And did that change significantly after Boris Johnson contracted the disease . Those of us outside the u. K. , it still doesnt look like Great Britain has a great plan in order to stop the spread of this virus. And as you know, weve had quite a difficult story of an mp that tested the npnp that tested positive that tested mp that tested positive for the virus. They had a very significant affect on the rate of infections. The problem, of course, is when the u. K. Came out of the lockdown wearing masks. It took a long time for the government to signal wearing a mask was an important measure. There was a lot of opening up without a great deal of restriction. Weve seen the consequences and there is still uncertainty, huge amount of debate, tremendous concern over the tradeoff between the economic effects, which are a disaster for many sectors of the economy, and the Public Health effect. There is still a debate. Were getting mixed messages. We know there is disagreement inside the cabinet. The number one concern for most of the British Public is their health, the economic effect, allowing their children to remain in school for the entire academic year. A lot of American Children are at home, studying online. The importance of leadership, weve always known leaders are important. The signals sent from the top, the policies, the optics, the images. There is nothing understating the significance of leadership in todays world and god hopes we move forward with this extraordinary news from the white house in a way that really protects the Public Health of the people and has a secure election, which is incredibly important for u. S. Politics. Anna let me ask you more about that. If President Trump does become unwell or worse, the election has been set in motion, hasnt it . So, is there whatever happens, an election in early november in the United States . Leslie we certainly have to assume there will be an election, and we have to assume President Trump will come through his case of covid19. Doesnt even want to consider that not being the case, that if he was unwell for an extended periods of time, there would be questions. Prospecthe process of the election not happening is low, but the weeks leading up to it, i think if he is like, at this point it feels like, at this point, in person campaigning appears to be over, certainly from President Trump. Its difficult to imagine the president returning to the campaign trail and rallies as he had. There will be a lot of people who feel they havent had the trust, that the president hasnt given them confidence because he has been out in public, presumably, and we dont know for sure, but presumably knowing hope hicks was unwell, attempting to selfisolate on air force one. The amount of uncertainty that ld create, especially over Older Americans, vulnerable groups, Older Americans are largely supporting Vice President biden at this stage, but it dampens any kind of rallyingthusiasm and that we would see in the weeks leading up to a president ial election, certainly this president ial election. Matt in the case of Boris Johnson, his infection got very serious. He ended up in the icu, incubated. He ended up at least in the icu, not on tubes. But it was harsh. If donald trump gets through this without that kind of issue, if President Trump and melania remain healthy, continue to work, even campaign, does that have the kind of effect and this is a great question we got from a viewer just now, where people think ok, this virus isnt really a death sentence. President trump got it and hes fine. Is this the kind of thing states would push to reopen even more quickly . Admit i think i have to its a concern i had even this morning. We hope the president and his wife and all this people that have been with the president remember, hes been with many people enclose proximate. Its not in close proximity. There is a concern how the president handles this message in the days and weeks ahead, and what, if he doesnt articulate that this is serious, even if the president has a mild case, his wife has a mild case, the implication for others who covid19 might spread to, either through the president or others. We know any number of people dont have mild cases. I think communicating the message has always been phenomenally important. Some people communicated very effectively. Governor cuomo, dr. Fauci, and others. But we havent seen leaders communicating. We only hope the president does that. If he doesnt, and the case is mild, of course the Public Health implications could be serious for a lot of americans. Anna leslie, thanks very much. Really good to get your thoughts. Out by wishing the president and Melania Trump well. We do that, too. Lets get a bloomberg first word news update. Laura President Trump tested positive for covid19. He tweeted he and the first lady have the virus and will isolate. It isnt certain how he contracted the dividers the virus. The u. S. Has caused the democrats 2. 2 trillion physical stimulus bill. They so far failed to reach a confirmation. Has bigger nancy pelosi says the vote does not slam the door House Speaker nancy pelosi says the vote does not slam the door with steven mnuchin. There are slower improvements in manufacturing. Thats according to a survey by the british chambers of commerce. It suggests the government may have to step up aid to prevent collapse over the winter. Today is the last jobs report before the election, and it is projected to show a show down slowdown in markets gains. Thats down from nearly 1. 4 million in august. It suggests the winner will inherit a shaky economic rebound. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Vivianathis is bloomberg. Anna laura wright in london. Lets get back to the markets and the reaction to president Donald Trumps positive coronavirus test. Joining us now is investment manager, head of global macro strategy. As you look at the initial followup from markets here, the initial reaction very risk off, as you might anticipate. Are you looking further ahead . What is the time horizon you deal with this information over . Are you looking just up to november or beyond . We try to look further out anyway, but in this context, it is difficult, even before the diagnosis, difficult to think further past november because we could have different outcomes depending on who wins the election. Following President Trumps diagnosis, i think at this point it should make a shouldnt make a big difference for the election. Its a question should he get ill and develop symptoms, does it have an impact on his campaign . We have two candidates so far apart, few are likely to switch views or change the vote based on this. At this point, it doesnt really change the outlook. As think the big question, especially in the short term, is about the fiscal stimulus and whether this is yet another hurdle towards getting this cares act, too the concern because would be hes not healthy enough sort someem sort of bipartisan agreement. Nancy pelosi work on a package worked on a package in the house, but that doesnt get us closer to the goal post. What needs to happen . As long as pelosi and mnuchin are talking, its already positive. They understand how necessary this cares act is, and given some of the recent data, even though its not been that bad, its 20 inng its the direction we need the next wave pointing in the next direction we need the next wave of stimulus. Were going to get pressure ahead of the reelection campaigns for a lot of people in congress. Were going to have pressure from the markets. President trumps positive diagnosis may be another one. Just try to avoid distractions and get together. Its not optional. The reality is, we will get fiscal stimulus. Its a question of timing at this point. Anna one reaction is in oil prices, brent down over 3 in this mornings session. Is that an underlying story about the possibility of lockdowns intensifying, the white house acutely aware of this virus, this lockdown in the United States to some degree, and across some geography . Does it become more likely . Is that what we see . Or is this a kneejerk reaction . Oil prices have been retreating for a couple weeks already. I think this is an extension of concerns of growth and the fact demand isnt going to pick up as much as anticipated. The growth is probably going to be softer than expected in q4, especially if we dont get the next phase of fiscal stimulus. Its not a surprise to see oil markets react. Some of it is going to be a bit kneejerk, may be extreme. We have to wait and see a few days have things develop how things develop. The initial reaction isnt surprising. Matt what do you think about the concerns the china relationship will worsen with this . And how do you think investors react to that . Weve already heard from a number of state run media outlets, or stay affiliated media outlets, some harsh comments about trump contracting covid19. No doubt, the president isnt going to take that likely likely. Lightly. Ly. No, hopefully the president will focus on Getting Better if he does develop symptoms. Relations between the countries werent fantastic to start with. Its not fantastic to see a bit of a deterioration heading into the election. We knew tensions were probably going to rise. Hopefully it doesnt change, materially. I still dont think well see an y kind of strong actions that would have a direct Economic Impact so close to the election in an economy that clearly needs all the support it can get. Anna thank you very much. Thank you for joining us. Lets pick up the conversation and breakdown more of the Market Reaction with our Senior Editor in newkets, still up york. Yes, carry on. Anna let me get back to one of the things we talked about, and that was around fiscal stimulus. , putting aside maybe if we should, the role of President Trump himself. I wonder if the white house is about to get a full on experience of covid19 in the sense theres been a lot of mixing and mingling, and there could be further infections. I wonder if that will change the calculus and get people and bash a few Heads Together and result in fiscal stimulus. Is that something the market is thinking about . I think at this point, the market is probably thinking lots of things that werent particularly possible or particularly likely a few hours ago are much likelier now. Think as i personally was bearish about the chances of anything happening on the fiscal front, i think the prevailing opinion was with me on that. This shakes things up and can only help, from where we are now, improves the chances of some real stimulus happening. So, just by forcibly rearranging the players, theres always a risk that the way has absolutely [indiscernible] too many people. Yeah, i think youre right. The best chance here is it probably does focus minds and makes for a much clearer and more streamlined negotiation. I do think this is good news for a fiscal stimulus. Matt john, thanks very much. Appreciate you staying up until 4 00 in the morning to talk to us, our Senior Editor for markets in new york, been up all night breaking the story. Anna just getting a red headline, walmart selling absent for six by 5 billion pounds asda for six by 5 billion pounds. President trump is said to be in good health. He and Melania Trump tested positive for covid19. What does this mean for the u. S. Election . This is bloomberg. Francine the u. S. President tests positive for covid19. Donald trump says he and the first lady have both tested positive for the virus. U. S. Futures dropped. The election is just over a month away. Treasuries and the endgame. A wakeup calls for the markets. Good morning, everyone. Welcome to bloomberg surveillance. I am Francine Lacqua here in