Stock Returns and the Spanish Flu, 1918-1920

We study the impact of the 1918 Spanish Flu on U.S. stock prices. Using a new weekly hand collected sample of 136 firms that traded on the NYSE, we examine the impact of the four waves of the flu on stock returns using panel regressions. The second and fourth wave of the pandemic significantly lowered stock returns by 33 and 57 percent on an annual basis, respectively. The large, but temporary impact of the virus on stock returns can probably be attributed to the fact that, unlike COVID-19, the flu hit the working age population particularly hard.