MBS Day Ahead: Trump's Covid Diagnosis is Not The Biggest Market Mover

Posted To: MBS Commentary

By now, most everyone has heard that the president was diagnosed with covid overnight. At face value, this seems like it should be very big news for financial markets. At a minimum, this has the potential to alter the schedule/venue of the next presidential debate. And of course more dire outcomes carry more significant consequences. One would expect a very big, very fast "de-risking" on both sides of the market. Sure enough, stocks and bond yields fell fairly quickly on the initial news, but not by nearly as much as you might expect. Moreover, the recent past includes several examples of stimulus-related headlines doing even more to move the market. Simply put, the Trump covid news wasn't even able to erase the stimulus-inspired rally from Wednesday. Even more interesting than…(read more)