Canadian stock market since COVID‑19: Why a V-shaped price recovery?

Jean-Sebastien Fontaine, Guillaume Ouellet Leblanc () and Ryan Shotlander

No 2020-22, Staff Analytical Notes from Bank of Canada

Abstract: Between February 19 and March 23, 2020, the Canadian stock market plunged due to the severe economic impact of COVID-19. By the end of the summer, the stock market had already recovered a significant portion of its losses, leaving many asking if investors see the economy through rose-coloured glasses. Despite these concerns, we find that current market valuations for companies on the Toronto Stock Exchange align well, on average, with the declines in earning forecasts observed since the start of the year. We also find these market valuations are consistent with the discount rate returning to its pre-pandemic level.

Keywords: Asset pricing; Coronavirus disease (COVID-19); Financial markets (search for similar items in EconPapers)
JEL-codes: G14 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-cfn and nep-fmk
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.bankofcanada.ca/2020/10/staff-analytical-note-2020-22/ Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsan:20-22

Access Statistics for this paper

More papers in Staff Analytical Notes from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().