A risk management specialist in Canada says that if a long history of viral pandemics repeats itself, our current coronavirus will just be a bad memory come summer. Moe Agostino, senior Risk Management specialist at Farms.com believes that COVID-19 has a predictable, three month, regional-life cycle, and he says that the world’s history of these events bears that out.
“You go back to 1958 Asian Flu, Spanish Flu of 1918, the Black Death of the 1600’s – what they all have in common is the fear, the panic, but its three months and done. After the first month you get those massive cases that move higher, and then after about two months it peaks, and then in the last month things start to calm down, and its over by the end of the third month.”
Agostino thinks that markets will begin to recover as we get closer to Easter-time. He bases his scenario on the belief that China is getting back on its feet, while COVID-19 has not yet reached its North American peak.
“In China the cases have peaked. Things should start to recover, and that’s what’s happening. They’re going back to work, and it’ll be over by about mid-April. The US is a month later, it started about mid-February, and cases are just starting to explode now. You should expect an end to it by about mid-May. But markets should start to recover probably in that April time frame.”
Moe Agostino says much of the market reaction was information overload – fueled by a 24-hour news cycle and social media speculation. And as a markets analyst, Agostino admits that, in events such as these, commodity and stock markets tend to experience a knee-jerk, worst-case scenario reaction.
“What markets are doing right now is they’re pricing in a worst-case scenario. The stock market tends to fall very quickly, the hardest. Commodities will fall with them but they don’t tend to fall as much, and if you look, they really haven’t, they’ve hung in there. If you look at the Shanghai Index it’s just shy of its all-time high. That’s not telling me the world’s coming to an end. We have these social media, the 24-hour news-cycle, and they’re over-blowing everything. You know, I think that everybody just needs to take a vacation if you can, and just relax and chill, and we’ll be fine.”