Why the global markets seem immune to the coronavirus contagion

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here. Welcome back to Bull Sheet. I’m Bernhard Warner, Fortune‘s global editor of finance and investing. Coronavirus. Impeachment. . Late last night I figured this trifecta of bleh news would take the […]

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.

Welcome back to Bull Sheet.

I’m Bernhard Warner, Fortune‘s global editor of finance and investing.

Coronavirus. Impeachment. Boeing. Late last night I figured this trifecta of bleh news would take the markets down a notch again today. But here we are with Asian stocks rebounding nicely, Europe getting a lift, and the U.S. markets poised to open in positive territory. The Dow and S&P 500 futures are, as I write, up about three-tenths of a percent.

Was I being too alarmist? I’m not so sure. 

I remember all too well the SARS outbreak, which roiled the markets in early 2003. I followed it daily from my perch on the equities desk at Reuters in London, my trusty Nokia 3210 somewhere there in the clutter. 

For a quick recap: the SARS outbreak killed nearly 800 people. The psychological toll was acute.

In Asia, people dramatically altered their daily routines to avoid contracting the virus. They stayed away from public transportation, restaurants, cinemas, airplanes. Its impact on the markets and the billions it cost the global economy has been much studied in the years since. (Hat tip to my former colleagues at Reuters for this snapshot of how pandemics in the developed world mess with the global economy—and the markets.) 

Today, on the eve of the Chinese New Year, humanity’s biggest occasion to travel, the coronavirus is spreading too. But we appear to be better informed this time, which could explain the so-far-so-good market reaction.

The SARS outbreak in 2003 was so unnerving because the Chinese government was so closed-lipped about the impact, and its plan to contain it. And this all predated Twitter and WeChat, so the further you were from the contagion, the more you were in the dark. In the absence of all else, the markets themselves served as a vital communications link.

Which brings me to today’s chart. I called up the market data folks at Refinitiv in London to get the MSCI China historical numbers for that period. It was more of a rollercoaster than I remember.

The MSCI China fell 11.5% in the wake of the Chinese government’s bungled communications plan back then. On and off over 10 weeks, until the end of April, the markets fell, plateaued and fell again. They eventually recovered, and then climbed, climbed, climbed. The points-swings were pretty crazy on the MSCI China—first down big, then up even bigger (39%). Eventually.

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SARS outbreak, by the numbers

This chart is not for the faint of heart. You’d hope some version of it is tacked on the wall of a Chinese ministry as a cautionary reminder of how not to manage a contagious outbreak.

Let’s hope 2020 will be a different story.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com