Yahoo Finance Trump's Covid-19 diagnosis, Fed meeting minutes: What to know in the week ahead
The revelation late last week that President Donald Trump had tested positive for Covid-19 amplified the already heightened uncertainty around the election, prospects for further fiscal stimulus and progress of the pandemic situation in the US. Markets reeled in response, with the three major indices tumbling on Friday before paring losses to close off of their session lows.
Developments around the president’s condition will no doubt remain front and center this week for the public and for investors.
“The news that President Trump and the First Lady have tested positive for Covid-19 has brought the pandemic back to the forefront of market attention and raised a lot of questions, with few immediate answers, ahead of next month's election,” Kit Juckes, macro strategist for Societe Generale, said in a note Friday. “I suspect Vice President [Mike] Pence gets more attention, and the VP debate with Senator Kamala Harris in Utah on Wednesday will be a much higher profile event.”
“Meanwhile, the premium the options market prices in the days after the election will extend further,” he added. “This doesn't make an immediate and conclusive outcome more likely, that's for sure.”
As of Sunday morning, the next presidential debate was still slated for Oct. 15 and the third for Oct. 22, though some have questioned whether these might be postponed, canceled or held virtually in light of Trump’s health.
A new poll released Sunday by NBC News and the Wall Street Journal conducted after last week’s presidential debate, but before news emerged that Trump had tested positive for Covid-19, found that former Vice President Joe Biden was leading Trump 53% to 39% nationally among registered voters in the survey.
Trump’s condition
A flurry of announcements out of the White House offered conflicting perspectives about Trump’s recovery over the weekend, after he was taken to Walter Reed National Military Medical Center Friday evening.
Saturday morning, Dr. Sean Conley, the physician treating Trump, said during a televised press conference that the president was “doing very well” and that the medical team was “extremely happy with the progress the president has made.” However, the physician dodged subsequent questions from reporters around specifics of Trump’s health, including the date of his last negative Covid-19 test and whether he had at any point been given supplemental oxygen.
And shortly after the press conference, White House Chief of staff Mark Meadows told reporters outside the hospital that the next few days will be “critical” and, “We’re still not on a clear path yet to full recovery,” according to AP, with the remarks undercutting the more upbeat assessment from Trump’s medical team.
Later, a video posted to Trump’s Twitter page included a four-minute clip of the president addressing the nation and offering another set of remarks on his health.
“I came here, wasn't feeling so well. I feel much better now. We're working hard to get me all the way back,” Trump said. “I have to be back because we still have to make America great again."
Since Trump announced his and First Lady Melania Trump’s positive Covid-19 test results early Friday morning, a number of other Republican lawmakers also disclosed their own positive tests. Namely, three Republican senators – Mike Lee of Utah, Thom Tillis of North Carolina and Ron Johnson of Wisconsin – also reported testing positive, with their diagnoses likely to confound Senate Republicans’ attempts to accelerate the confirmation of Judge Amy Coney Barrett to the Supreme Court.
Prospects for further fiscal stimulus out of Congress also hang in balance. House Speaker Nancy Pelosi, D-Calif., suggested during an interview with MSNBC on Friday that Trump’s diagnosis might in fact boost the likelihood of passing a near-term stimulus package by underscoring to administration officials the gravity of the virus. The House of Representatives on Thursday voted to advance a $2.2 trillion package, though the sum still diverges from the $1.6 trillion proposal Treasury Secretary Steven Mnuchin, the negotiator on behalf of the White House, had last put forth last week.
Fed meeting minutes
While developments around Trump’s Covid-19 diagnosis and the election will likely eclipse this week’s cadence of economic reports and corporate earnings results, remarks and releases from the Federal Reserve and its officials will still be of interest. Federal Reserve Jerome Powell is slated to give a speech at the National Association for Business Economics Annual Meeting on Tuesday, and the Federal Open Market Committee’s September meeting minutes are set to be released on Wednesday.
The minutes will be especially of interest since last month’s meeting formalized Fed officials’ guidance around their tolerance for inflation, with officials telegraphing that they would opt to keep rates low even if inflation were to creep up above their 2% target.
“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” the Fed said its Sep. 16 statement.
The Fed’s latest Summary of Economic Projections also showed that officials predicted core personal consumption expenditures – the central bank’s preferred inflation gauge – would not reach 2.0% until the end of 2023, suggesting the benchmark interest rate could remain near-zero until even after that year.
Powell, in his September post-FOMC meeting press conference called the guidance “very powerful.” Two FOMC officials, however, dissented with the contours of the guidance. Dallas Fed President Robert Kaplan argued that the guidance should give Fed officials more “flexibility” on when to lift rates, and wanted to keep the Fed’s previous language of keeping rates near-zero “until the Committee is confident the economy has weathered recent events.” Minneapolis Fed President Neel Kashkari dissented but suggested the central bank should commit even more strongly to holding rates near-zero until inflation reached 2% “on a sustained basis.”
The minutes will likely provide more color on the discussions that produced these dissents. They will likely also serve as another means of detailing Fed officials’ assessments of the pandemic’s impact on economic activity in the near- and medium-term.
Economic calendar
Monday: Markit US services PMI, September final (54.6 expected, 54.6 in prior print); Markit US composite PMI, September final (54.4 in prior print); ISM Services Index, September (56.2 expected, 56.9 in August)
Tuesday: Trade balance, August (-$66.2 billion expected, -$63.6 billion in July); JOLTS Job Openings, August (6.5 million expected, 6.618 million in July);
Wednesday: MBA Mortgage Applications, week ended October 12 (-4.8% during prior week); Consumer Credit, August ($14.000 billion expected, 12.250 billion in July)
Thursday: Initial jobless claims, week ended October 3 (820,000 expected, 837,000 during prior week); Continuing claims, week ended September 26 (11.4 million expected, 11.767 million during prior week)
Friday: Wholesales Inventories, August final month over month (0.5% expected, 0.5% in prior print)
Earnings calendar
Monday: N/A
Tuesday: Tesco (TSCO.L), Paychex (PAYX) before market open; Levi Strauss (LEVI) after market close
Wednesday: Lamb Weston Holdings (LW), RPM International (RPM) before market open
Thursday: Domino’s Pizza (DPZ) before market open
Friday: N/A
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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