If anything that'll prop up stock prices further. We were about to hit a demographic time bomb in the mid-2020s as the baby boomers started to retire and need to sell their 401(k)s to live on and afford medical treatment. If they all die suddenly, then their assets get passed on to their prime-working-age children, who have no need to cash them out. More savings finding their way into a dwindling supply of available stock = higher stock prices.
That's a few years off, though. During the crisis itself, when nobody knows whether they'll live or die or what sort of interventions they need stay alive, I expect to see massive panic selling.
> If they all die suddenly, then their assets get passed on to their prime-working-age children, who have no need to cash them out.
It feels morbid talking about this, but:
It depends on how the assets are passed. If most of them are in IRAs, then they'll get passed to heirs as inherited IRAs, and the new SECURE Act in the US will require the heirs to distribute the contents of those IRAs over the next 10 years, which is likely similar to how the retirees might have timed their withdrawals.
Unless consumer spending goes up significantly (also possible, and also good for the economy), the actual funds will likely get rolled into other investments after paying taxes, though. That's what I did after inheriting my dad's IRA: I didn't need the money, so it came out as an RMD and then went straight back into a different investment account.
I guess it could also go toward the down payment of a house, inflating the housing market even more. If lots of old people die the stock of houses on the market should go way up though, somewhat blunting the impact of this.
That's a few years off, though. During the crisis itself, when nobody knows whether they'll live or die or what sort of interventions they need stay alive, I expect to see massive panic selling.