We study the short-term market reactions of US and European stocks during the beginning of the COVID-19 pandemic. Employing an event study, we document that stocks react significantly negatively to the announcement of the first death in a given country. While our results suggest that the announcements of country-specific fiscal policy measures negatively affect stock returns, monetary policy measures have the potential to calm markets. These reactions are either intensified or lessened by firm-specific characteristics such as tangible assets, liquidity, and institutional holdings.
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Source |
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| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC7467079 | PMC |
| http://dx.doi.org/10.1016/j.frl.2020.101745 | DOI Listing |
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