Does COVID-19 Affect the Financial Market?
19 Pages Posted: 20 Apr 2020
Date Written: April 17, 2020
This paper studies the relationship between the COVID-19, an infectious disease, and different financial assets. We find that the change in the newly confirmed cases per thousand people in US rather than that in China can positively predict the S&P 500 return. Moreover, we find that the change in the newly disease confirmed cases per thousand persons in US is negatively correlated with the change in the T-Bill spread. However, we observe that the change of China disease newly confirmed cases per thousand people can positively or negatively affect the change in the T-Bill spread. Furthermore, the change in the newly confirmed cases per thousand people cannot predict the Bitcoin return whatever of US or China.
Keywords: COVID-19, S&P 500 index, Bitcoin, T-Bill, Return
JEL Classification: C22, G15, D81
Suggested Citation: Suggested Citation