Yahoo Finance’s Alexis Christoforous and Brian Sozzi speak with Editor-in-Chief Andy Serwer about the implications of President Trump’s COVID-19 diagnosis.
ALEXIS CHRISTOFOROUS: Good morning, Andy. I know you wrote an article about this topic for our website over the weekend. And you look at history sort of as a guide to how the market reacts to an illness in a president. And we've certainly seen this before, but not when the coronavirus, of course, but similar situations.
ANDY SERWER: Exactly. I mean, we've had a number of scenarios over the course of our history, Alexis, where presidents have become ill and have even died in the White House. It's actually shocking that eight presidents have died while they were sitting in the White House or acting as presidents, I should say, 17.8% percent of the 45 presidents. And of course, all kinds of scenarios have unfolded where presidents have been sick.
Ronald Reagan was shot. Dwight Eisenhower had a heart attack. Woodrow Wilson got the flu 100 years ago, which is sort of an interesting parallel to President Trump's situation. And on and on you go. And the bottom line is that the stock market sometimes takes a big hit, particularly when Dwight Eisenhower had his heart attack, the market was down about 10%. But it rebounds.
And that's because the president's health is not the same thing as a recession, for instance. A recession is something that would actually make the market go down. I can see Jared Blikre sitting there in our virtual green room. He helped me run the numbers here. And I think, overall, the cases Jared found, that the market goes down about 1% or 2% when one of these things occurs and bounces back pretty quickly.
BRIAN SOZZI: Andy, just hearing some chatter the Street this morning that the reason why the market is bouncing back, at least in the pre-market here, is that New Journal poll that shows Joe Biden ahead by 14 points. And if Joe Biden is elected, that would bring some much-needed near-term certainty in government. How much stock do you put in that?
ANDY SERWER: Well, you know, I saw that too, Brian. I also saw someone that tweeted out this morning that the reason the market's up, the futures are up, is because President Trump's going to get released today. So this is what makes a market. This is why Brian Sozzi and Alexis Christoforous work every morning, right? You guys-- I mean, we try to figure this stuff out.
But, you know, of course, first of all, we all wish President Trump and the first lady a speedy recovery. If things go downhill, and he is somehow incapacitated, or even worse, things could get very dicey for the election. Now, we have all kinds of protocols in place. But still, it would be unsettling in an already-unsettling environment, you guys.
ALEXIS CHRISTOFOROUS: You know, we've got the vice presidential debate coming up this week. And the next presidential debate is supposed to be October 15th. No word on whether or not there won't be. But let's just say, for instance, there isn't, that President Trump's doctors say, you know what, we don't think he's well enough to do that. What does that do to the stock market?
ANDY SERWER: Yeah, I mean, first of all, I don't think you're going to see the stock market take off as long as President Trump is sick. I think that if President Trump recovers, the market could go up a bunch, or somewhat, or maybe not. But it's hard to see with this uncertainty-- you know, that's the market's least favorite word-- stocks kind of going off to the races at this point.
And, yeah, I mean these various scenarios about debate or no debate, the vice presidential debate taking on a new level of import, shall we say. But if the president is somehow incapacitated, that Vice President Pence could possibly take over temporarily, and then there's a scenario where if President Trump passed away, that he'd have to be replaced, and there have already been 2.6 million votes counted, ballots mailed already, I mean, that could be a huge, huge mess.
We told you guys out there watching that October was going to be a very interesting month. We're only a week in, less than a week in, and so far, we've had President Trump's tax returns, the debate, and the president getting COVID. And it's only, what, four days in, five days into the month.