How will the coronavirus affect the stock markets?

The coronavirus is a source of uncertainty for the stock markets . Stock markets fall and, especially, those securities whose business is related to the country of origin: China.

When stocks fall, almost all national and international newspapers and newscasts automatically look for reasons to justify the falls. The case of the coronavirus, a priori, is no different. When the stock markets react downward, then the journalists in charge of the stock market news begin to write articles such as: “The coronavirus drags the stock markets” or “How is the coronavirus affecting the stock market”.

The idea is not bad, the problem comes when you are not consistent about what you report. For more than a week, we have been able to see different comments about it. When stocks go up, then investors lose their fear; when they fall, uncertainty increases; when it comes back up, it tries to recover; if they rise steadily, they put aside the fear of the coronavirus. There is always an excuse for the stock market to go up or down.

How does the coronavirus affect the stock market?

A study carried out by Charles Schwab and Factset reveals that, in general, bags are immune to this type of disease. However, as always, past returns are not a guarantee of future ones. And, therefore, this study does not guarantee that a global contagion cannot occur. It is unlikely, but it can happen.

Everything will therefore depend on the ability of the Chinese authorities to manage a disease that has already affected nearly 3,000 people and caused 80 deaths. In this sense, the Government of the country is building a hospital in record time to combat the coronavirus.

The most penalized companies

The only ones to which we could clearly attribute a current negative effect are those companies that have a direct relationship with the Asian giant. For example, it is logical that the most penalized values ​​are those of the tourism sector. In fact, in the case of Spain and the IBEX 35 , as of January 17, IAG and Meliá left 11%, while Amadeus fell 7%.

At a European level, the European travel and leisure sector (STOXX Europe 600 Travel & Leisure) has fallen by 5% so far this year, while some US stocks such as Booking do so by 8%.


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