The Impact of the COVID-19 Pandemic on the U.S. Economy: Evidence from the Stock Market

Abstract

The coronavirus crisis has damaged the U.S. economy. This paper uses the stock returns of 125 sectors to investigate its impact. It decomposes returns into components driven by sector-specific factors and by macroeconomic factors. Idiosyncratic factors harmed industries such as airlines, aerospace, real estate, tourism, oil, brewers, retail apparel, and funerals. There are thus large swaths of the economy whose recovery depends not on the macroeconomic environment but on controlling the pandemic. Macroeconomic factors generated losses in industries such as production equipment, machinery, and electronic and electrical equipment. Thus, reviving capital goods spending requires not just an end to the pandemic but also a macroeconomic recovery.

Unconditional and conditional analysis between covid-19 cases, temperature, exchange rate and stock markets using wavelet coherence and wavelet partial coherence approaches

“…The findings are also in line with results by ( Sharif et al., 2020 ), suggesting the short-term causality between the COVID-19 pandemic and the US stock market is significant at all frequencies analyzed. Expansionary policies by the US Federal Reserve and government led to a 37% increase in its stock prices from the end of March 2020 ( Thorbecke, 2020 ). Furthermore ( Zhang et al., 2020 ), opine that the individual stock market reactions are clearly linked to the severity of the outbreak in each country across the globe and the greater uncertainty has caused the markets to become highly volatile and unpredictable.…”

The Impact of News about Pandemic on Borsa Istanbul during the COVID-19 Financial Turmoil

“…Many studies are deal with the impact of COVID-19 on the financial markets, such as the impact on stock market returns and volatility (Al-Awadhi et al, Alhammadi, 2020;Albulescu, 2020;Ali et al, 2020;Ashraf, 2020bAshraf, , 2020cBahrini & Filfilan, 2020;Contessi & Pierangelo, 2020;Harjoto et al, 2020;Mazur, Dang, & Vega, 2020;Rababah et al, 2020;Thorbecke, 2020;Topcu & Gulal, 2020), market illiquidity (Baig et al, 2020), contagion effect (Okorie & Lin, 2020), government interventions or responses against COVID-19 (Ashraf, 2020a;Zaremba et al, 2021;Zaremba et al, 2020), cryptocurrencies (Conlon & McGee, 2020;Corbet, Larkin, & Lucey, 2020;Goodell & Goutte, 2020), tourism and leisure sectors (Chen et al, 2020;Ghosh, 2020), uncertainty (Jeris & Nath, 2020), social trust (Mazumder, 2020), dividends (Krieger & Mauck, 2020), and commodity prices (Corbet, Goodell, & Günay, 2020;Devpura & Narayan, 2020;Huang & Zheng, 2020;Salisu, Ebuh, & Usman, 2020).…”

The Effect of Pandemic News on Stock Market Returns During the Covid-19 Crash: Evidence from International Markets

“…Several studies focus on the effect of Covid-19 on financial markets, such as the impact on stock market returns and volatility (Al-Awadhi et al, 2020;Albulescu, 2020;Ali et al, 2020;Ashraf, 2020bAshraf, , 2020cBahrini & Filfilan, 2020;Contessi & Pierangelo, 2020;Gu et al, 2020;Harjoto et al, 2020;Kartal, Kılıç-Depren, & Depren, 2020;Mazur, Dang, & Vega, 2020;Rababah et al, 2020;Sergi et al, 2021;Thorbecke, 2020;Topcu & Gulal, 2020), trade volume (Chiah & Zhong, 2020;Harjoto et al, 2020), stock repurchases (Pirgaip, 2021), government responses or interventions (Ashraf, 2020a;Chen et al, 2020;Zaremba et al, 2020;Zaremba et al, 2021), contagion effect (Okorie & Lin, 2020), market illiquidity (Baig et al, 2020), tourism and leisure sectors (Karabulut et al, 2020;Ghosh, 2020;Kaczmarek et al, 2021), herding behavior (Chang, McAleer, & Wang, 2020;Espinosa-Méndez & Arias, 2020), cryptocurrencies (Conlon & McGee, 2020Corbet, Larkin, & Lucey, 2020;, mutual funds (Mirza et al, 2020;Yarovaya et al, 2021), dividends (Krieger, Mauck, & Pruitt, 2020;Mazur, Dang, & Vo, 2020), uncertainty (Jeris & Nath, 2020), housing prices (Qian, Qiu, & Zhang, 2021) and oil prices (Corbe...…”