Coronavirus & S&P 500: It’s Bad, but Not That Bad

Coronavirus may not have officially reached our shores, but US markets have plunged headlong into panicky selling, as investors contemplate its impact on a variety of industries and global trading partners. The stocks in the S&P 500 — the 500 largest public companies in the country — lost $810 billion in value yesterday, following a $1.3 trillion loss on Monday, which makes for a total two-day loss of $2.1 trillion or 6.3%.

Things are looking grim.

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However, it’s not that bad when considering similar market swoons. There have been 10 two-day declines of more than 6% since 2008. Six of them were more than the combined loss from Monday and Tuesday.

  • November 19 and 20 of 2008 saw S&P stocks drop 12.4% as the breadth and depth of the global recession came into full view.
  • The Dow fell 680 points (or 8.1%) on the two days ending December 1, 2008 as sentiment soured further.
  • For the two days ending on August 8, 2011, S&P 500 stocks fell 6.7% after US sovereign debt dropped in rating from AAA, or “risk free”, to AA+.
  • A comparable one-day drop occurred on February 8, 2018, when “fears about the bond market, inflation, and interest rates seized investors,” causing stocks to fall 3.75%.

Hopefully, we won’t be reporting on the worst three-day stock-market declines on Thursday.

Check back in with the Morning Fix tomorrow to see how fears about Coronavirus are seeping into pharma, e-commerce, and consumer electronics.