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President Trump’s positive coronavirus test is ‘good’ for stock market: Analyst

Yahoo Finance’s Sibile Marcellus joins Kristin Myers to break down a new analyst note that claims the market will benefit from President Trump’s positive coronavirus diagnosis.

Video Transcript

KRISTIN MYERS: Well, according to Tom Lee, the president's diagnosis might actually be a good thing for markets. We have Yahoo Finance's Sibile Marcellus to talk us through that argument. Hey, Sibile.

SIBILE MARCELLUS: President Trump's announcement that he tested positive for the coronavirus is good for markets. That's according to Tom Lee. He's a managing partner at Fundstrat Global Advisors. Now, this might seem counterintuitive at first because as we saw, the stock market's reaction to President Trump announcing that he tested positive was we saw stocks fall. At one point, the Dow went down more than 400 points.

Now, since then, we've seen stocks have pared back some of those losses. You just pointed out the stock markets now in the green. But what we're seeing here is that Tom Lee's saying that if President Trump is able to recover quickly from the coronavirus, that is good for markets because it would indicate that the US has a handle on a coronavirus and that it's not as deadly as it was before.

Now, during the debate this week, President Trump said, in defending the administration's way of tackling the coronavirus, he said that there are less people dying from the virus once they've contracted it. And we know that Fed Chair Jerome Powell has said that the US economy won't fully recover unless there is a reliable treatment or a vaccine. So we'll all be closely monitoring President Trump's evolution as he tries to recover quickly from the coronavirus pandemic. And we'll see what that means in terms of implications for the full reopening of the US economy, if there is an effective treatment for all Americans.

KRISTIN MYERS: Now, Sibile, Tom was also saying that the president getting sick might also lead to, I guess, better outcomes for mask wearing and compliance, correct?

SIBILE MARCELLUS: Well, when it comes to mask wearing compliance, it's clear that that is an effective strategy for fighting the coronavirus pandemic. Now, President Trump has refused to have a federal mandate for all Americans to wear the mask, but clearly many states have required that residents wear it, and I know for-- for my sake and many Americans will continue to wear the mask as we await, hopefully, an effective coronavirus treatment or a vaccine.