Association between COVID-19 cases and international equity indices

TL;DR

This study investigates the relationship between COVID-19 pandemic dynamics and stock market performance across 92 countries, finding no significant link between pandemic control and equity market behavior.

Contribution

It provides a comprehensive analysis of COVID-19 case trajectories and demonstrates the lack of correlation between pandemic management and equity market performance.

Findings

Equity markets showed high uniformity and were mostly affected in March.

No significant relationship between COVID-19 control measures and market performance.

Identified five characteristic classes of COVID-19 case trajectories.

Abstract

This paper analyzes the impact of COVID-19 on the populations and equity markets of 92 countries. We compare country-by-country equity market dynamics to cumulative COVID-19 case and death counts and new case trajectories. First, we examine the multivariate time series of cumulative cases and deaths, particularly regarding their changing structure over time. We reveal similarities between the case and death time series, and key dates that the structure of the time series changed. Next, we classify new case time series, demonstrate five characteristic classes of trajectories, and quantify discrepancy between them with respect to the behavior of waves of the disease. Finally, we show there is no relationship between countries' equity market performance and their success in managing COVID-19. Each country's equity index has been unresponsive to the domestic or global state of the pandemic. Instead, these indices have been highly uniform, with most movement in March.