7th August 2020

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We all of course wish everyone suffering from this pandemic a speedy and strong recovery.

Being male and 74, President Trump is most definitely in the highest risk group for developing serious consequences from contracting the virus. Receiving aggressive early treatment, as he is, will no doubt help.

Nevertheless, further deterioration in the short term is probable. Before, hopefully, then achieving a rapid return to good health. This virus is known to generate long term chronic health issues as well, and so President Trump is by no means out of the woods, and will not be for quite some time. 

Markets, it seems, almost attempted to reassure themselves on Friday, but I do not expect that rally to last. There is now too much at stake. 

It is not just that the President could possibly be unable to maintain his duties, but it is the great uncertainty about what could happen out of all this.

Next in line, should the President's condition deteriorate, is Vice President Mike Pence, and he is capable of reasonable status quo stewardship to the election. Which would then, itself, be in disarray, should President Trump remain incapacitated. 

Should Pence become ill at any point, and we know this is possible, then the next in line is Nancy Pelosi. Yes, Trump's enemy. Apart from the irony of that situation, Pelosi can be as extreme as Trump in views and behaviour at times, and has proven so repeatedly over the past 12 months. There is no way of knowing what this would lead to, but would hopefully, again see a reasonable stewardship of power until the election.

In any event, such monumental uncertainty being foisted upon a market already more than fully priced, stretched far from the reality of Main Street, USA, today, could well lead to sustained, significant, and even dramatic market decline.

We are already fundamentally bearish stocks. This event could be a stringent catalyst in this regard. 

Clifford Bennett 

Photo: The New York Times




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