A Potential Coronavirus "Second Wave" in the Fall Would Slam Stocks Again

The turmoil in the markets may make an unwelcome encore appearance in the fall. Yes, there's a chance that cases of the coronavirus will again start to rise as outside temperatures drop.

While there's no way of knowing now if this will happen for sure, viral respiratory diseases like the coronavirus, such as the flu, tend to follow seasonal patterns.

That's why "flu season" is synonymous with fall and winter.

The good news here is that if true, the arrival of spring in the northern hemisphere could help arrest the further spread of COVID-19.

That would help limit the damage to the economy and the stock market in the near term.

But it also means a resurgence of the coronavirus is likely to strike in the latter months of the year. And that would trigger another stock market crash.

We've already seen substantial economic damage, starting with the disruption to the global supply chain in China. The travel industry is getting slammed. And as more consumers – and workers – stay home, the impact will affect nearly every U.S. business.

That's why stocks are getting hammered.

Even if the coronavirus subsides over the summer, the economic damage will have the economy on its heels for much of 2020 – if it doesn't tip it into a full-blown recession.

Now imagine the impact of a second round of the coronavirus on the economy and the markets.

This doesn't mean you should panic. But investors need to bear in mind that this crisis could play out in stages over an extended period. You can't let down your guard.

So how likely is it that we'll see a return of the coronavirus in the fall?

Here's what the experts are saying…

Why the Coronavirus Could Turn Out to Be Seasonal

The Centers for Disease Control is among those expecting the coronavirus to slow with the arrival of warmer weather.

"Other viral respiratory diseases are seasonal, including influenza and therefore in many viral respiratory diseases we do see a decrease in disease in spring and summer," Dr. Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, said on a conference call on Feb. 25. "And so we can certainly be optimistic that this disease will follow suit."

Multiple factors play into this seasonality:

• Cold air causes irritation in the nasal passages, making people more susceptible to viral infections.
• People spend more time indoors in close proximity in the colder months.
• Respiratory viruses tend to spread in droplets in the air. Cold and dry air allows a virus to survive longer, giving it a better chance of infecting another victim.

This doesn't mean people can't get infected in warmer weather, just that it's much less likely.

Paul Hunter, an infectious disease expert at Britain's University of East Anglia, echoes the CDC hope that the coronavirus will decline during the summer months.

"Whether it comes back again is a moot question," Hunter told Reuters. "It would not surprise me if it largely disappeared in summer only to reappear again in the winter."

Two coronaviruses closely related to COVID-19 – severe acute respiratory syndrome (SARS) and Middle-Eastern respiratory syndrome (MERS) – are known to spread significantly faster in colder weather. One study found that SARS spread 18 times faster in cold weather than in warmer weather.

A rebound of a pandemic virus would not be unprecedented.

One of the worst respiratory virus pandemics in history, the Spanish flu of 1918, actually hit in three distinct waves.

The first wave, which hit the late winter of 1918, was not nearly as severe as the second wave, which hit in the fall of that year. A third wave struck in the winter and spring of 1919.

By the time it ended, the Spanish flu had infected a third of the world's population, killed more than 50 million people, and sliced 5% from the global economy.

That doesn't mean the coronavirus will get that bad; we have far better ways of fighting such diseases today.

But it doesn't take much to stoke public fears that affect consumer behavior – and the markets.

So here's what investors can do to cope with the market gyrations both now and down the road should the coronavirus strike again in the fall…

How to Prevail in a Coronavirus Market

David Zeiler

About the Author

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David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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