Key Takeaways

  • Trump, first lady and top aide test positive for coronavirus
  • POTUS "feeling well," will quarantine in the White House
  • Stimulus bill, Supreme court nominee hearing could be affected

Hours after one of his top aides tested posted for the novel coronavirus, President Trump announced he too had received the same diagnosis. The president and first lady Melania, who also tested positive, have postponed all public events and will quarantine at the White House where a medical team will watch over them. "Rest assured I expect the president to continue carrying out his duties without disruption while recovering, and I will keep you updated on any future developments," said Dr. Sean Conley, the White House physician, in a letter. Vice President Mike Pence and second lady Karen Pence have both tested negative. 

Other world leaders who have become infected with the virus at some point and recovered include Bolivia's President Jeanine Añez, Brazil's President Jair Bolsonaro, U.K. Prime Minister Boris Johnson and Honduran President Juan Orlando Hernandez. 

What Happens Next

The news of Trump's positive test, which comes at a critical time for the country and a mere month before the presidential elections, hit global markets hard. It's unclear how this will impact the country's virus response, stimulus discussions, reopening plans, the elections, or the Supreme Court confirmation hearings. Also unclear at this point is the health of others in the administration the president was in contact with. This comes on top of other election-related concerns like delays and ambiguous results. 

If the president develops severe symptoms or is incapacitated, the vice president would receive more powers and be "acting president" for a period. The government would function as it usually does. According to experts interviewed by Bloomberg, the potential for constitutional chaos only arises if both the president and vice president were to become incapacitated. Any sign of a delay to elections would also spark a big public reaction and develop into an issue, said Roger Jones, head of equities at London & Capital.

As for markets, a strong third quarter with a +7.5% gain like the one we just had, has lead to a strong fourth quarter the past 11 times it happened, according to LPL Research. The fourth quarter also usually delivers the highest returns of any year. Even in election years, Q4 finishes higher a very impressive 82% of the time and is up 2% on average. (see chart above) But precedence is getting more and more unreliable since there are so many variables this year and the twists keep coming.

S&P 500 election years
Source: LPL Research.