Breaking news of the week: Trump's COVID-19 and Market Volatility
1. Trump's COVID-19 diagnosis brings ambiguity to the election race.
On Friday, October 2, the whole world learned that US President Donald Trump, along with his wife, had contracted the coronavirus. Trump said on Saturday that they will face several difficult days in treatment for COVID-19.A month later, the US presidential elections will take place. Trump's illness has wreaked havoc on his presidential campaign and has shown in part how he is coping with the pandemic. According to opinion polls, he lags behind his Democratic rival Joe Biden.The President of the United States has repeatedly downplayed the threat of the coronavirus pandemic, even though it claimed the lives of more than 208,000 Americans and seriously damaged the country's economy.2. Pay more attention to talking about incentivesAt the moment, negotiations are underway in Washington on a new financial aid package. Trump's illness has also heightened the already intense scrutiny of the fact.US House Speaker Nancy Pelosi said on Friday that negotiations are in progress and recommended that airlines stop transferring employees to unpaid leave and layoffs. The House of Representatives could pass a separate law to allocate funds to help airlines.It is not known for certain whether Trump's illness or a weaker September jobs report last Friday will affect the adoption of the new stimulus package.Another sign that the US economy is declining is the slowdown in the recovery of the labor market.3. Market volatility is still highInvestors are confident that any deterioration in the president's health could weaken US stock indices. They showed the worst results in a month after the March sell-off.There are speculations that if the uncertainty in the indices persists, the tech and dynamic stocks, that have boosted the market this year, could become particularly vulnerable to a sell-off. The high-tech Nasdaq fell more than 2% on Friday, double the drop in the S&P 500.4. Powell's speechUS Federal Reserve Chairman Jerome Powell will deliver a speech to the National Association for Business Economics on Tuesday to reaffirm the need for additional fiscal stimulus to support the economy.In addition to Powell, several other Fed representatives will speak this week, including Chicago Fed Chairman Charles Evans, Atlanta Fed Governor Rafael Bostic, New York Fed Governor John Williams, Minneapolis Fed Governor Neil Kashkari, and Boston Fed Governor Eric Rosengren.The Fed is also expected to release minutes of the September meeting of the Federal Open Market Committee (FOMC) on Wednesday. This will highlight the message that the prospects for a rate hike in the next couple of years are slim.5. Failures in the euro zone bailout fundEurozone finance ministers are due to meet in Brussels on Monday to discuss the creation of a €750 billion coronavirus recovery fund.Germany insists that only the countries who respect the rule of law can benefit from the fund amid growing concerns in the EU about backsliding on the rule of law in Poland and Hungary. This proposal provoked the outrage of these two countries.Italy, Spain, and Greece, whose economies have been hardest hit by the pandemic, will lose out on any delay in funding the recovery.
