COVID-19: stock market reactions to the shock and the stimulus

Using the WHO announcement on 11 March 2020 and the Federal Reserve Bank announcement on 9 April 2020 as two events that represent the shock and the stimulus, this study finds that COVID-19 caused a negative shock to the global stock markets, especially in emerging markets and for small firms. We fi...

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Bibliographic Details
Published in:	Applied economics letters Vol. 28; no. 10; pp. 795 - 801
Main Authors:	Harjoto, Maretno Agus, Rossi, Fabrizio, Paglia, John K.
Format:	Journal Article
Language:	English
Published:	London Routledge 07-06-2021 Taylor & Francis LLC
Subjects:	Announcements Companies Comparative studies Coronaviruses COVID-19 Developed countries Economic analysis Economic theory Economics Emerging markets event study Securities markets Small business small firms Stimulus Stock exchanges United States > US
Online Access:	Get full text
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Summary:	Using the WHO announcement on 11 March 2020 and the Federal Reserve Bank announcement on 9 April 2020 as two events that represent the shock and the stimulus, this study finds that COVID-19 caused a negative shock to the global stock markets, especially in emerging markets and for small firms. We find that the US stock market experienced positive abnormal returns from the Fed stimulus compared to other developed countries and emerging markets. We find that the positive abnormal returns from the stimulus were garnered by the US large firms instead of the small firms.
ISSN:	1350-4851 1466-4291
DOI:	10.1080/13504851.2020.1781767