October is traditionally the month that US stock markets surge forward, following the annual September declines. This also meant that I confidently increased investments into US ETFs through Singapore roboadvisor startup, Syfe and US stocks through Tiger Brokers, with high hopes of seeing the past month’s paper losses get erased.
Problem that no one anticipated was that Trump would announce that he tested positive for Covid-19. This, following an atrocious US Presidential debate that felt more like ugly bickering between two old men, insults aplenty. And, one in which Trump mocked Biden’s strict use of masks, saying “I don’t wear masks like him”:
When the news first broke, my wife would ask me: “Do you think stock markets will tumble?”
To which I confidently replied: “Nah, I don’t think so.”
It has been proven on multiple occasions that I am terrible with reading the stock market. So, I do not know why I did not have any self-doubt when I said what I said. I sort of figured that Trump would get the best possible treatment, just like UK Prime Minister Boris Johnson and others.
It was only after talking to friends and seeing how personal finance influencers reacted that I realised that there’d be a selloff. It turned out to be a mild selloff, but the question is, will things further decline? I’m inclined to think that the usual October surge will be replaced with more volatility. This could be good for investors who are still looking for bargains.
A ploy to discredit the elections?
On Singapore social media, the reactions to news on Trump’s health ranged mostly from gloating to skepticism. In Singaporeans’ defence, the US President is too distant a figure for people here to relate to and sympathize with. He is in Biden’s words, more of a ‘clown’. But there are supporters, too.
Some wondered whether Trump was faking it. This is because getting Covid-19 would improve Trump’s electability. Public sympathy is good for politicians, just as Boris Johnson and Taiwan’s former President Chen Shui-Bian would have learned. Some reactions to The Straits Times & CNA social media posts on Trump’s health condition:
Conspiracy theorists would say this is also a convenient ploy for him to potentially delay election day voting. It would be earth-shattering news should the vote be delayed. But, you never know in Trump’s America. He has already floated the idea of delaying the vote, and now that he is sick, this gives the idea more credence.
Based on current prediction polls, Biden is likely to win. But if all goes according to pundits and polls, and Biden emerges the winner, what we will see is Trump ultimately discrediting the result, saying that his health was poor and/or the system was rigged due to mail-in votes. This election result, if Biden wins marginally, will likely go all the way to the Supreme Court.
All that means there is potentially months of uncertainty. Uncertainty spells volatility for stock markets. Here are the real experts with their insights:
- Ark Invest’s Cathie Wood on the US election impact on the economy
2. Dave Lee on the impact of Trump’s Covid-19 diagnosis