In February and March, when the Covid-19 pandemic was just gathering steam, investors began scouring the historical record for precedents: How do you forecast the market in such a global crisis?
Many zeroed in on the 1918-20 Spanish flu pandemic. On the surface, it bore many similarities to the Covid-19 emergency, involving a lethal virus with fast-spreading global contagion. And so it was encouraging to investors that the U.S. stock market was impressively resilient throughout that health crisis.
Not much the same as 100years ago
It actually flatlined . Never went to new high though. Bull market started in 1922 or so and crashed to the ground by 1929 and trended down till 1933
Wish the people, jobs, housing, and essential workers were faring as well. TrumpVirus TrumpFailsAmerica UnfitToBePresident UnfitForOffice UNFIT
They crashed big in the 'forgotten depression' of 1920-1921. 😏
And THEN what happened?
The fall will be great...
UK billionaires see personal wealth grow by £25bn
Tl;dr Government mandated and unprecedented shutting down of a good chunk of our economy and locking people in their houses for months adds more uncertainty to markets than the actual disease. Markets hate unprecedented uncertainty and are not sure just how to react.
That's because our leaders weren't stupid enough to shut down the economy, even though the 1918-1919 pandemic was far, far worse. Our leaders these days are thoroughly incompetent, as proven also by the riots.
Everybody also Voted in person....
The Powell Put didn’t exist in 1918-20
According to a recent WSJ article it was mostly due to large investors like SoftBank betting on tech and buying billions of dollars of stocks. So it is not clear that the market overall is as healthy as it looks.
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