Just when 2020 looked to be off to a good start with a partial trade deal, low interest rates and strong corporate earnings, the Coronavirus put the brakes on stock market growth. Anxiety over the outbreak hit financial markets around the world Monday, sending stocks from Japan to Germany to the U.S. to their worst days in months.

The viral outbreak that originated in Wuhan, China, has infected thousands and spread to the U.S., Japan, South Korea and other countries. The disease threatens to hamper an already-slowing Chinese economy, in turn potentially jeopardizing the global recovery that many investors had counted on this year. Morgan Stanley is projection global growth reduction of about 0.25% if the virus peaks by February or March.

The Coronavirus outbreak reminds us of recent global health scares, and we wanted to research how markets have responded in the past to epidemics. Thankfully, Dow Jones and Marketwatch did some digging and compiled this table below:

This (surprisingly) puts the historical average S&P 500 12-month return at 14.15%.

Obviously, this data should be taken with a giant grain of salt. It would be a crime to assume viral outbreaks are universally going to lead to above average returns. The data does, however, remind us that there is a lot more information the market won’t ignore in the face of a crisis. There are potentially thousands of data points from earnings, economics, demographics, politics, sentiment, interest rates etc. which can determine short- and long-term returns.

Time will tell how impactful this virus is. But if history is any indication, outbreaks aren’t a great sell signal for stocks and portfolios.

*https://www.marketwatch.com/story/heres-how-the-stock-market-has-performed-during-past-viral-outbreaks-as-chinas-coronavirus-spreads-2020-01-22