The Stock Market is About to Tell Us the Truth About COVID-19
President Trump has tested positive for COVID-19. And we are about to see a REAL COVID-19 test play out in the stock market.
Let me explain…
The COVID-19 pandemic has been one of the most polarizing issues in American history.
One group of Americans believes it’s one of the worst health crises in history and that our entire society should be restructured to deal with it.
Another group of Americans believes the entire disease and associated shutdowns were one gigantic scam, designed to cripple the economy and damage President Trump’s chances at reelection.
The stock market is about to reveal which one of these is closer to the truth.
President Trump and the Stock Market
President Trump’s obsession with the stock market is almost beyond parody. Very early into his Presidency, Donald Trump branded the stock market’s returns as illustrating the success of his policies.
This attitude extends well beyond the President himself. Treasury Secretary Steve Mnuchin has stated that the White House views the stock market as a “report card.”
What this means is that the Trump administration believes stock prices represent their performance leading the country and the economy.
With that in mind, it’s not surprising that stocks are DOWN on the news that the President and the First Lady have tested positive for COVID-19.
Keeping in mind that President Trump is 74 and overweight — which puts him at greater risk of complications / more severe illness — stocks appear to be extremely worried about the odds of his recovery.
What Comes Next Will Tell Us Everything
No other mechanism on the planet is better at discounting the future than the stock market. It accurately predicted the government shutdown as well as the V-shaped recovery in the economy in 2020 alone.
So, if the market begins to rebound and rally strongly, that’s a clear signal that the market is discounting a full and rapid recovery from President Trump — along with his winning a second term.
If, however, the market begins to REALLY collapse, it’s a clear signal that the market is discounting real problems for President Trump and the possibility that Joe Biden will be the next President of the United States.
This is THE October surprise for this election. And it’s the one thing we need to watch to figure out who’s going to win.
Editor, Money & Crisis