The S&P500 started to drop only on Feb 20 2020, and the Nikkei 225 and the FTSE 100 on Feb 21 2020. Yet as early as Jan 120, COVID-19 was reported in Hong Kong, South Korea, and Japan. Their citizens already wore masks in response, and masks' prices were gouged. Why didn't North American stocks ebb, at least a whit, in response earlier than Feb 20 2020?
As at Feb 20 2020, commercial flights weren't suspended, and airports didn't screen or monitor arrivers. I know hindsight is 20/20, but doubtless airline passengers would spread COVID-19 worldwide from China. I agree that the extent of the spread was uncertain, but why wasn't the unquestionable existence of transmission priced in?
Doesn't this lag contradict the semi-strong form of the EMH? I quote Zvi Bodie, Alex Kane, Alan J. Marcus's Investments (2018 11 edn). p 338.
The semistrong-form hypothesis states that all publicly available information regarding the prospects of a firm must be reflected already in the stock price. Such information includes, in addition to past prices, fundamental data on the firm’s product line, quality of management, balance sheet composition, patents held, earnings forecasts, and accounting practices. Again, if investors have access to such information from publicly available sources, one would expect it to be reflected in stock prices.