Article: Coronavirus: Impact on Stock Prices and Growth Expectations
The Review of Asset Pricing Studies
Abstract: We use data from aggregate stock and dividend futures markets to quantify how investors’ expectations about economic growth evolved across horizons following the outbreak of the novel coronavirus (COVID-19) and subsequent policy responses until July 2020 ...
| Abstract | We use data from aggregate stock and dividend futures markets to quantify how investors’ expectations about economic growth evolved across horizons following the outbreak of the novel coronavirus (COVID-19) and subsequent policy responses until July 2020 Dividend futures, which are claims to dividends on the aggregate stock market in a particular year, can be used to directly compute a lower bound on growth expectations across maturities or to estimate expected growth using a forecasting model We show how the actual forecast and the bound evolve over time As of July 20th, our forecast of annual growth in dividends points to a decline of 8% in both the United States and Japan and a 14% decline in the European Union compared to January 1 Our forecast of GDP growth points to a decline of 2% in the United States and Japan and 3% in the European Union The lower bound on the change in expected dividends is -17% in the United States and Japan and -28% in the European Union at the 2-year horizon News about U S monetary policy and the fiscal stimulus bill around March 24 boosted the stock market and long-term growth but did little to increase short-term growth expectations Expected dividend growth has improved since April 1 in all geographies |
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| Keywords | covid19 |
| Publisher | WHO |
| Document type | Article |
| Note | WHO #Covidence: #756959 |
| Database | COVID19 |
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