During the first seven weeks of 2020, despite ominous news from China, Italy and Iran about the spread of the COVID-19 virus, US stock indexes hit all-time highs. Then, in little more than a month, the market crashed. By March 23, the Dow Industrials dropped 37%; the S&P 500, 34%; and the NASDAQ Composite, 30%. It seemed the markets suddenly realized that the virus’s spread to the U.S. would cause widespread business shutdowns, school closings, and stay-at-home orders. A major recession, if not a depression, seemed imminent.
Then, in response to the crisis, the government implemented a number of unprecedented monetary and fiscal measures. By mid-April, as the numbers of infections and deaths from the virus mounted daily, the markets staged a sharp recovery, which continued into June. Justified or not—only time will tell—the markets’ collective wisdom seemed to think the virus would soon go away and the government’s drastic measures would bring a sharp economic recovery.
Is this what typically happens during epidemics and pandemics? Because they don’t occur often anymore, most people have not experienced them and don’t have a clue as to what is typical. But they have happened often enough in history, which can offer some guidance. In this talk, Richard Sylla, Ph.D. will examine several epidemics and pandemics that have occurred over the course of U.S. history.
This event is co-sponsored by the Gabelli Center for Global Security Analysis, the CFA Society of New York, and the Museum of American Finance.