What Pandemic History Says About the Wuhan Virus, Stocks

The Wuhan coronavirus has officially hit the US, extending the deadly outbreak that started in China and has since spread to Taiwan, Korea, Japan and Thailand on the eve of the Lunar New Year—a peak Asian travel season. As is typical when new infectious diseases appear, headlines are linking the outbreak to market volatility and warning of a more severe impact. Those who have been investing for a while are probably now thinking back to 2002 – 2003, when pundits warned the SARS (severe acute respiratory syndrome) outbreak would hit markets. Over the years, we have also seen similar handwringing about bird flu and swine flu impacting stocks. Last decade's Ebola outbreak sparked fears for Frontier Markets. Yet history has overwhelmingly shown markets typically move on quickly from disease-related pullbacks, and even the most severe outbreaks haven't caused bear markets.