Corona crisis: impact on the stock market stronger than the Spanish flu with 50 million deaths
Although about 50 million people died from the Spanish flu in 1918, the Dow Jones score fell only 14.3%. Since the decline of February 17, 2020 following the coronavirus pandemic, the American index has again fallen by 34.5%, according to a new infographic from Kryptoszene.de. Nevertheless: comparisons with other financial crises show that share prices could fall further.
In contrast, during the economic crisis of the 1930s, the price of the Dow Jones fell by around 89% in total. During the 1987 and 2008 crashes, this decreased by about 36 and 54 percent respectively, as shown in the infographic. The Spanish flu, on the other hand, had a much smaller impact on share prices despite the high number of deaths. The Kryptoszene.de survey is based on data from “Bloomberg“And the”Rhine-Westphalian Institute for Economic Research“.
Meanwhile, there is a large variance in the duration of a stock market crash. In the Great Depression, which began in 1929, 34 months passed before the Dow Jones reached its previous peak before the economic crisis. In 1987 it was only 2 months and in 2008 17 months.
The DAX falls even more sharply than the American index
However, it is not only the Dow Jones that is losing value. The DAX has also lost around 37.24% in points since February 17, 2020. The leading German index is down across all sectors. Companies in the mechanical engineering and mobility sectors are the most affected. The smallest groups in the energy and raw materials sector – but here too, the average losses amount to 17.36%.
Coronavirus Could Attract Investors
Although it is still unknown how long the corona virus has been pushing stock prices south: the past has shown that major stock market disruptions can also benefit investors.
And following the latest corona pandemic, at least German politicians fear that German stocks or companies will even be sold. Federal Transport Minister Scheuer said that there was not only a viral attack, but that an economic attack could also flourish thereafter.