Coronavirus: Impact on Stock Prices and Growth Expectations

Abstract

We use data from aggregate stock and dividend futures markets to quantify how investors’ expectations about economic growth evolved across horizons following the outbreak of the novel coronavirus (COVID-19) and subsequent policy responses until July 2020. Dividend futures, which are claims to dividends on the aggregate stock market in a particular year, can be used to directly compute a lower bound on growth expectations across maturities or to estimate expected growth using a forecasting model. We show how the actual forecast and the bound evolve over time. As of July 20th, our forecast of annual growth in dividends points to a decline of 8% in both the United States and Japan and a 14% decline in the European Union compared to January 1. Our forecast of GDP growth points to a decline of 2% in the United States and Japan and 3% in the European Union. The lower bound on the change in expected dividends is -17% in the United States and Japan and -28% in the European Union at the 2-year horizon. News about U.S. monetary policy and the fiscal stimulus bill around March 24 boosted the stock market and long-term growth but did little to increase short-term growth expectations. Expected dividend growth has improved since April 1 in all geographies.

COVID-19 and currency market: a comparative analysis of exchange rate movement in China and USA during pandemic

“…The constant increase in cases and deaths shows that the consequences of the pandemic are trying to restore the situation. On the other hand, the USA graph in the right pane indicates a linear trend with tremendous increment in the cases along with the reported deaths of the COVID-19, which somehow results in the downfall of 3.8% in the economic growth of the USA (Gormsen & Koijen, 2020).…”

The impact of COVID-19 shocks on the volatility of stock markets in technologically advanced countries

“…Subsequently, demonstrating return arrangement in such a market requires a logical structure that can adapt to deviations in stock returns. For this reason, in the wake of fulfilling the presumption for choosing the suitable model, we adopt TARCH model estimations proposed by Glosten et al (1993) and Zakoian (1994).…”

The Impact of the National Nutrition Program 2017–2030 on People’s Food Purchases: A Revenue-Based Perspective

“…For example, infectious diseases have dealt a heavy blow to per capita income and national GDP [104,105], human capital accumulation [106][107][108], house prices [109], etc. The long duration and wide impact of the COVID-19 pandemic have also prompted many scholars to conduct in-depth studies on the economic impact of the COVID-19 pandemic [110][111][112].…”