Industry Stock Prices around Covid-19

In this study, I examine how market participants respond to global uncertainty around the Covid-19 pandemic. More specifically, I analyze the industries most affected by the outbreak. The pandemic has created events never before seen at such a global level. Governments closed their country’s borders and quarantined their residents. Business owners closed their doors. These unforeseen events put the world economy at a standstill. I find that these decisions caused the U.S. stock markets to crash by more than 30%. The industries that experienced the most negative value-weighted abnormal returns were Carry, Meals, and Books. The industries that exhibited the most positive value-weighted abnormal returns were Transportation, Healthcare, and Smoke. Perhaps policies and financial assistance can be better allocated to those industries that suffered the most. Additionally, investment managers might be able to use this information to hedge against future losses, in the case of a similar pandemic