Effects of the COVID-19 Pandemic on Worldwide Financial Markets and Opportunities for Increasing Wealth Levels

Abstract

This paper sets out to explore the consequences of the COVID-19 pandemic on worldwide stock, commodity and cryptocurrency markets. We investigate whether and in what direction these assets are linked with the number of patients and deaths caused by the COVID-19. Correlations of financial markets with the number of cases and deaths caused by COVID-19 provide evidence that the new virus has been mostly influential in a negative manner. Deaths from COVID-19 have triggered greater effects than the number of patients in stock markets of advanced European countries and the UK. This is also valid in rich but developing countries in Asia and the Middle East. Moreover, the largest European economies, the UK, the US, Australia and New Zealand, all Asian countries but also developing African and Middle East countries in a lesser extent exhibit negative linkages with COVID-19 cases and deaths. All commodities but gold that is a safe haven are negatively connected with the COVID-19 expansion while all cryptocurrencies present a positive nexus with the coronavirus.