Announcement that Trump has been infected with COVID-19 has further unsettled investors and business heads who were already on edge ahead of the November election.
It’s a truism that investors hate uncertainty. But 2020 had been unusually chaotic, even before trump & his better half tested positive for coronavirus. The diagnosis deals a new psychological hit to a recovery that was already losing steam. Uncertainty could be just as damaging economically as anything else this year.
It’s been clear for a while that this year will go down as an extraordinarily unsettled year. But the level of uncertainty really matters for organizations, employees and investors.
When faced with lack of certainty, people usually spend less and save more. Businesses cut back on production, investment and hiring. Financial markets become more volatile and increasingly hard to trade.
That’s primarily because lack of certainty clouds the future. High uncertainty causes risk-averse households to delay big purchases. Experts suggests that individuals are particularly cautious when their job prospects are unclear.
The Covid-19 remains a potent danger almost worldwide outside China, and the US election looms as another source of uncertainty. Before he tested positive for coronavirus, president refused to guarantee a peaceful transition of authority, threatening a contested election & potential constitutional crisis without historical precedent.