Market Assessment of COVID-19

Kwan, Simon H.; Mertens, Thomas M.

Journal Article

Market Assessment of COVID-19

Abstract: News about the COVID-19 public health crisis has affected asset prices to varying degrees across sectors of the U.S. economy. Stocks in the utilities, real estate, and energy sectors initially suffered the worst sector-specific shocks, while the information technology, health-care, and telecommunications sectors fared relatively better. Businesses with higher financial leverage saw larger declines in their valuations. A simultaneous repricing of credit derivatives suggests concerns about insolvency contributed to the valuation declines. Although some stocks are recovering from the initial lows, significant differences across sectors remain.

Keywords: COVID-19; financial markets; economic conditions; fiscal stimulus;