The United States election soap opera has new twist: President Donald Trump is COVID-19 positive. What does that mean for markets?

More unpredictability, probably.

Trump’s positive test for the virus adds another layer of uncertainty on a “growing list of imponderables” that is likely to heighten market volatility in coming weeks, reports Oxford Economics.

While serious, Trump’s current condition is pure speculation.

If he doesn’t recover, history suggests the market response could be “steep but short”.

When John F Kennedy was shot and killed on November 22 1963, the S&P 500 plunged 2.8 per cent but quickly recovered within days.

If Trump recuperates — which is more probable — this market volatility won’t be over until an election winner is determined.

“While markets are pricing in greater volatility around the presidential election as a surge in mail-in votes raises the odds of a delay in declaring the new president, we fear a larger risk-off trade if a winner is not quickly declared,” Oxford Economics lead US economist Nancy Vanden Houten says.

“More severe market disruptions are an important risk if a winner is not immediately known.”

According to UBS, most market declines occur in the first four trading days after an uncertain election outcome.

In 1948, Harry Truman’s surprise victory sent the S&P 500 tumbling almost 4 per cent in one day.

It took 34 days for the winner to be decided in the 2000 election between George W. Bush and Al Gore. In the two weeks following the election the Dow Jones Industrial Average fell more than 5 per cent.

 

To Markets…

Last week’s 2.9 per cent tumble represented the Aussie market’s worst week since mid-April.

On Friday, US share markets fell but pared early losses after the White House reassured everyone that the US President was not yet incapacitated.

On this public holiday Monday (for some!), the benchmark ASX200 index has reversed Friday losses with a gain of 122 points – or a massive 2.1 per cent – in the first hour of trade.

It held onto the gains to be up 2.19 per cent to 5,918.3 points by 12:30pm AEDT.

 

WINNERS

Here are the best performing ASX small cap stocks at 12pm Monday, October 5:

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CODE NAME PRICE % CHANGE MARKET CAP
PPY Papyrus Australia 0.027 59 $ 5,139,847.98
VR1 Vection Technologies 0.185 42 $ 109,872,993.75
JHL Jayex Healthcare 0.053 39 $ 7,651,794.91
ANL Amani Gold 0.002 33 $ 11,757,295.12
CCE Carnegie Clean Energy 0.002 33 $ 16,712,178.68
CFE Cape Lambert Resources 0.008 33 $ 10,900,223.34
RFN Reffind 0.002 33 $ 1,864,887.93
RAN Range International 0.022 29 $ 6,143,314.55
REE Rarex Limited 0.145 26 $ 42,275,754.33
WCN White Cliff Minerals 0.015 25 $ 5,839,198.58
8CO 8Common 0.135 23 $ 20,120,882.98
IXR Ionic Rare Earths 0.017 21 $ 37,745,793.20
BRK Brookside Energy 0.006 20 $ 6,410,000.00
SMI Santana Minerals 0.003 20 $ 5,088,061.22
RTE Retech Tech Co 0.335 20 $ 65,215,537.24
EMN Euromanganese 0.22 19 $ 20,284,064.15
EMT Emetals 0.021 17 $ 7,203,600.00
AOA Ausmon Resorces 0.007 17 $ 3,909,236.06
FPL Fremont Petroleum 0.0035 17 $ 11,775,537.56
GLA Gladiator Resources 0.0035 17 $ 6,983,502.51

 

Vection (ASX:VR1), the ASX’s only virtual reality stock, capped off a 10-fold rise in six months after joining a major Facebook program.

And Texas-focused oil play Brookside Energy (ASX:BRK) has told shareholders all necessary surface equipment for production at its Mitchell well is in place.

 

LOSERS

Here are the worst performing ASX small cap stocks at 12pm Monday, October 5:

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CODE COMPANY PRICE % CHANGE MARKET CAP
DCX Discovex Resources 0.0045 -36 $ 8,373,148.53
ROG Red Sky Energy 0.002 -33 $ 6,108,549.83
VPR Volt Power Group 0.002 -33 $ 27,508,600.67
CLZ Classic Minerals 0.0015 -25 $ 26,084,103.96
MBK Metal Bank 0.008 -20 $ 11,845,083.04
RBR RBR Group 0.009 -18 $ 11,008,030.95
AAJ Aruma Resources 0.0075 -17 $ 10,254,725.13
CAE Cannindah Resources 0.02 -17 $ 5,797,988.45
MLS Metals Australia 0.0025 -17 $ 10,945,058.33
MSR Manas Resources 0.006 -14 $ 18,502,137.42
RNX Renegade Exploration 0.006 -14 $ 4,988,386.47
CYQ Cycliq Group 0.0035 -13 $ 7,838,919.93
EFE Eastern Iron 0.007 -13 $ 3,789,483.47
VIC Victory Mines 0.0035 -13 $ 17,665,285.96
GTG Genetic Technologies 0.008 -11 $ 74,355,540.69
APH AP Hemp 0.17 -11 $ 9,355,570.55
TGN Tungsten Mining 0.13 -10 $ 111,710,069.44
AEV Avenira 0.018 -10 $ 17,257,056.36
BIQ Buildingiq 0.009 -10 $ 3,736,729.49