In 2003 the world was fretting about the spread of SARS, which ultimately killed almost 800 people, mainly in Asia. But while it wasn’t the global phenomena that the Ebola virus has become, it did have an impact on US financial markets. This was particularly true of the US dollar, which most prognosticators thought should have been even weaker than it was but for SARS concerns.
“While not a panacea, favorable currency dynamics should at least help to mute the effects of weaker domestic demand in the US’s key foreign affiliate markets,” International Treasurer reported in the July issue of the newsletter, quoting July 2003 Morgan Stanley report. “Our currency team’s outlook for a further 30 percent correction in the dollar is supportive of current levels of global profits, although the postponement of a cyclical recovery in Europe, stalling demand in Japan, and the lingering effects of SARS will likely limit further upside potential in the near term.”
Nearly 11 years later, Ebola is merely one of the factors contributing to the dollar’s strength, while in equities, aside from contributing to the downside for socks, is mainly having an affect on individual stocks like airlines and other travel-related companies.