Market structure dynamics during COVID-19 outbreak

TL;DR

This paper examines how the US market structure changed significantly during COVID-19, correlating with infection rates, and compares it to past crises, indicating potential for further evolution or recovery.

Contribution

It provides an initial analysis of market-structure changes during COVID-19 and compares them to historical crisis periods, highlighting ongoing evolution.

Findings

Market-structure changed dramatically during COVID-19

Changes followed the number of infected cases

Market-structure resembled the 2008 crisis period

Abstract

In this note, we discuss the impact of the COVID-19 outbreak from the perspective of the market-structure. We observe that the US market-structure has dramatically changed during the past four weeks and that the level of change has followed the number of infected cases reported in the USA. Presently, market-structure resembles most closely the structure during the middle of the 2008 crisis but there are signs that it may be starting to evolve into a new structure altogether. This is the first article of a series where we will be analyzing and discussing market-structure as it evolves to a state of further instability or, more optimistically, stabilization and recovery.