Very, very early this morning the Texas Department of State Health Services confirmed a second health care worker has been diagnosed with Ebola. The news sent shivers down the spine of markets still trying to find a footing after the recent pole-axing to stocks around the world. Futures took a slight dip around the time the story hit the newswires but let’s be honest, just about anything could take two or three points out of the futures given the restive state of investors these days.
According to polls run by Gallup, Americans are still relatively unconcerned about the risk posed by the disease. At least they were as of last weekend. In their most recent poll 77% of those asked were unconcerned about getting Ebola, the same level reported when the question was asked the prior weekend.
Beyond hyper speculative drug stocks and sector-specific concerns (airline industry, I’m talking to you) history suggests investors are better off ignoring health scares when it comes to their investing decisions.
I covered the bigger picture somewhat bullish relationship between pandemics and stocks a couple weeks ago. If we narrow our focus to what happened in 2009 during the Swine Flu scare and the Bird Flu panic of 2005 you can see really no dramatic impact on the broader market. Then, as now, there were plenty of better things to worry about, at least when it came to your investing decisions.
Related: Ebola arrives in U.S., investors bid up biotechs
That’s not to say specific industries weren’t impacted. The Bird Flu of 2005 was a disaster for the airline sector. From mid-July to mid-October the NYSE Arca Airline ETF (XAL) was whacked to the tune of 27%. What’s more interesting than that is that it had almost fully recovered those losses by the end of the year as the threat faded.
Your take away is this: statistically you’re still more likely to die from the flu while getting hit by lightning the same day you win PowerBall than you are to die of Ebola. It’s not likely, is what I’m saying. There are plenty of reasons to be concerned about stocks and distrust our government in its handling of Ebola, but that’s not a trading thesis.
It’s news to most of Wall Street but human misery isn’t always a chance to make money. Go figure.
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