The Effect of Viral Outbreaks to Global Markets

Posted by under In Focus, Investing . Published: February 11, 2020

The outbreak of the 2019-nCov or Novel Coronavirus is definitely affecting businesses around the world, most especially in China and Asia, including the Philippines.

Apart from the real threat to public health and safety, social media is also being plagued with fake news, which adds to the already-worried behavior of people around the world.

Thus, many traders and investors are cautious, and carefully watching how the coronavirus epidemic is affecting global markets.

However, it’s interesting to note that historically, such reactions are often short-lived.

In fact, according to Dow Jones Market Data, the S&P 500 experienced a gain of 14.59% during the time when SARS was a global health threat. And 12 months after, global markets even posted an average gain of 20.76%.

Below is a table of past viral outbreaks and how the broad-market benchmark reacted during different times after the first reports of the epidemic, as basedon the Dow Jones Market Data.

Epidemic Month 6-month % change
of S&P
12-month % change
of S&P
HIV/AIDSJune 1981-0.30-16.50
Pneumonic plagueSept 19948.2026.30
SARSApril 200314.5920.76
Avian fluJune 200611.6618.36
Dengue FeverSept 20066.3614.29
Swine fluApril 200918.7235.96
CholeraNov 201013.955.63
MERSMay 201310.7417.96
EbolaMarch 20145.3410.44
Measles/RubeolaDec 20140.20-0.73
ZikaJan 201612.0317.45
MeaslesJune 20199.82N/A
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What can we learn from these numbers?

First, there’s no question that overall markets can go down. But it’s also clear that markets can bounce back after worldwide epidemics.

Second, these times of volatility bring great opportunities for those who are willing to take the risk. That is, to take advantage and buy now, and sell when markets rally up, as shown by historical numbers.

Of course, the table shows what happened in the past. And it is possible that something completely different will happen in the present case. It’s important to remember this.

Interested to learn more? Watch this:

Below is a video interview I did with Jeff Guo, who is the Business Development Associate of eToro for the Philippines; who shared with us more insights on the global markets in light of the 2019-nCov outbreak.

Plus he also shares some thoughts on a couple of companies in the U.S. stock market, and how we can profit from all these volatility with minimal risks.

Also, if you’re interested, you can open a FREE eToro account today, just visit this link: http://bit.ly/etorosignuplink

Risk Disclaimer: The content discussed in the video is intended for educational purposes only and should not be considered as an investment advice. Past performance is not an indication of future results.




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