In February and March, when the Covid-19 pandemic was just gathering steam, investors began scouring the historical record for precedents: How do you forecast the market in such a global crisis?
Many zeroed in on the 1918-20 Spanish flu pandemic. On the surface, it bore many similarities to the Covid-19 emergency, involving a lethal virus with fast-spreading global contagion. And so it was encouraging to investors that the U.S. stock market was impressively resilient throughout that health crisis.
Now, half a year after the current crisis began, it is clear that this “Covid market” is writing its own playbook.
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