‘Hardly Anything Else Matters’: One Bank Games Out Scenarios As Trump Has ‘Mild Symptoms’

As you might imagine, analysts spent Friday morning gaming out possible scenarios around Donald Trump’s positive COVID-19 test.

The dramatic news shook markets and robbed a mixed September jobs report of whatever thunder it might have otherwise engendered.

Trump is experiencing “mild symptoms”, The White House says. Markets, already struggling to sort out an impossibly convoluted macro narrative headed into the election, are now tasked with trading what Nomura’s Charlie McElligott called “another remarkable twist”.

Read more: Nomura’s McElligott On Trump Virus News – This ‘Risks A Rapid Change To The Market’s Assigned Election Probabilities’

For his part, Deutsche Bank’s Alan Ruskin attempted to game out “a variety of fresh political scenarios”.

First up is the obvious question: “Will President Trump be OK to run?” Assuming the answer is yes, Ruskin asks:

Will he get a large sympathy vote? Yes, he wins? Or, No sympathy vote, Trump loses.

In the latter scenario, The White House could have “further reason to dispute the election”, Ruskin cautions.

Beyond those top-tier questions, he wonders what happens if Biden gets sick. “Biden falling ill would result in the biggest market adjustments, arguably enhancing uncertainty” which would be “risk/equity negative, even if it helps the Republicans”.

While one could plausibly argue that Mike Pence would have an edge over Kamala Harris (would that even be the matchup?), that assumes (and you’ll forgive me for being blunt) that voters don’t actually listen to the candidates speak. Despite the spin from the administration, Harris is not a “radical”. She’s a prosecutor. Which one could very fairly argue is the opposite of a “radical”. And she is a far superior public speaker to Pence, who most expect to be virtually defenseless in the forthcoming debate between the two.

Frankly, nobody would know how to trade a scenario where both Trump and Biden fall seriously ill.

Steve Mnuchin (and Pence, by the way) tested negative Friday, but as Ruskin went on to note, “contact tracing is going to track through the full echelon of Washington leaders”, a process that will probably “further reduce [the] prospect of economic action”.

“Maybe this will be the moment where people will say, OK, masks, sanitation, treatment”, Nancy Pelosi ventured, during a Friday interview with MSNBC.

Speaker Pelosi says Pres. Trump’s behavior during pandemic “was a brazen invitation for something like this to happen,” adds that his positive test is "very sad" and that she's "nonetheless hopeful that it will be a transition to a saner approach to what this virus is all about.” pic.twitter.com/mLHDag0kBe

— MSNBC (@MSNBC) October 2, 2020

“It might be a learning experience”, she then mused, expressing optimism around the possibility that America could be ready for “a saner approach to what this virus is all about”.

“Against this backdrop, hardly anything else matters”, Deutsche’s Ruskin said, summing up. He added: “That’s it. Good weekend”.