• While the awful human cost of the Coronavirus is climbing, and disruptions in China are now severe, the Coronavirus has thus far had a modest impact on U.S. equity markets. The S&P 500 down 3.1 percent since its recent peak on January 17th, 2020, after China reported the virus to the World Health Organization. This suggests markets believe that the economic impact on the U.S. will be small.
  • At the same time, the equity market impact of the virus has been similar to that of SARS after four weeks. As SARS spread, the economic impact grew, and equity markets responded.
  • It is too soon to tell whether the Coronavirus will be contained, or be more harmful than SARS, but equity markets fell 12 percent at their nadir after 15 weeks of SARS and are currently showing a very similar path.


The recent discovery of Coronavirus in Wuhan, China has drawn comparisons in some corners to SARS. Academic research found that the latter disease cost the global economy $40 billion, a substantial portion of which was through reduced consumption. To compare the relative severity of the diseases, we can compare the impact on equity markets of Coronavirus and SARS over the course of their development. Since equity markets incorporate all relevant information, they should provide an efficient measurement of the virus effect.