Despite “Knee Jerk” Market Reaction, Stocks Up 1.5% on Week

The news of President Trump testing positive for COVID-19 sent ripples through equity markets. This morning I noted that I think this is a “knee jerk” reaction that ultimately pushed the Standard and Poor’s 500 index down about 1.0% on the day. Overall, I think the President’s diagnosis is a positive development for the path of COVID-19 in the U.S. Foremost, Trump’s diagnosis should repudiate many of the skeptics who dismissed the need for masks, PP&E and social distancing. This should boost compliance with these measures and could help contain the recent surge in cases.