As Hillary Clinton recovers from pneumonia, should markets worry about the state of her health?

Mike van Dulken, head of research at Accendo Markets, says Yes.

Markets are right to be concerned about the health of the US Democratic presidential nominee.

First, they had increasingly been pricing in her beating Republican rival Donald Trump, who could be disruptive for the economy, and this health scare calls that into question. Everyone gets under the weather. But voters want honesty, and the fact that her campaign did not admit that Hillary Clinton was suffering from something more serious than allergies until it was upgraded to pneumonia adds to headwinds from Clinton’s email scandal.

Second, it calls into question the type of President Clinton would actually be. The electorate needs to know they are voting for someone fit to uphold official duties, physically and ethically. Clinton has had previous need for medical attention and this has led some to ask whether something more serious could be lurking. The price of running for the Oval Office is already high, perhaps it needs to be higher. Is solid proof required that she is indeed in a position to be commander in chief?

Neil MacKinnon, global macro strategist at VTB Capital, says No.

Markets will worry about Hillary Clinton’s unfortunate illness only if it forces her out of the presidential race and gives Donald Trump a lift in polls. The markets prefer, and have been pricing in, a Clinton administration. A Trump administration would undoubtedly force a rethink with regard to what economic policy might look like in 2017.

For the time being, though, it is Janet Yellen rather than Clinton that is of major interest. The tumble in equity and bond markets has shaken investors out of summer slumbers as they react to what seems a more hawkish Fed at a time when US economic data is somewhat mixed. There is broader concern that the major central banks have reached the effective limit of policy. Some argue that ultra-easy policies are now the problem rather than the solution.

The cracks are appearing in the bond market, threatening an end to the 35 year bull market, and investor revulsion against negative yields is growing. Should both equities and bonds crash, Yellen will be well and truly “one and done”.