More than three weeks after the shock from the coronavirus outbreak resulted in an across-the-board sell-off in U.S. stocks and other risk assets, several indexes are back at record levels. This sharp V pattern repeats the experience of two other unanticipated shocks in the last six months: the September attack on Saudi Arabian oil production that took out half of daily output and the January U.S. missile attack that killed a senior Iranian general. It is a pattern that illustrates the now deeply ingrained investor conditioning of “buy the dip” in the fear of missing out on yet another profitable opportunity.

The similarities also go well beyond what has transpired in terms of prices. They also involve the signals sent by central banks.  Accompanied by a supportive economic narrative, this has reinforced the notion that this is yet another shock that is temporary, containable and quickly reversible. Yet the markets have yet to internalize an important difference: This shock is taking longer to reverse itself on the ground, and the longer that persists, the deeper and the broader the economic damage.

After declines of 2.5 percent between Jan. 23 and Jan. 27 and 1.8 percent on the last day of the month — both due to coronavirus concerns — the S&P 500 Index roared back to a record close at the end of last week. The Dow Jones Industrial Average and the Nasdaq stock indexes have behaved similarly, as have many others around the world.

This “V” pattern has been mirrored in the VIX, the volatility index that is often referred to as a gauge of market fear. It spiked to 18.5 and again 19.5 before declining steadily to close at less than 14 on Friday. The pattern has been less pronounced, however, when it comes to the behavior of yields on U.S. Treasuries and is almost absent for many segments of the commodities markets. This sheds light on the influence of central banks on both the price behavior and underlying investor conditioning in the markets.

As in the case of other shocks in recent years, the initial coronavirus sell-off prompted central banks to signal their awareness of the heightened risk to growth and their readiness to provide stimulus should this risk translate into growth weakness. This was particularly the case for the People’s Bank of China and the Federal Reserve. Both signaled that they were monitoring developments carefully, reinforced their commitment to timely policy responsiveness and, in the case of the PBOC, loosened monetary policy through both lower interest rates and huge direct provision of liquidity.

Interestingly, the consensus economic narrative has also embraced a V pattern for the growth impact, both within China and globally, despite the high level of uncertainty associated with the evolution of this particular shock. The result is a host of projections that incorporate lower growth this quarter followed by a rebound in the next one, with limited impact on the year as a whole. It is a pattern that both supports the market price action in stocks and, I suspect, is also heavily influenced by it.

The speed with which the economic consensus in the marketplace embraced the V raises interesting questions about the evolving nature of the relationship between analysts’ projections and market action. It could well be increasingly similar to the one with central banks, in which they have flipped from leading monetary policy to becoming more and more hostage to investor sentiment.

This possible shift for economic analysts, as opposed to corporate ones, would be a new phenomenon. In the contrasting case of the Saudi attack, for example, they were initially a lot less optimistic than markets about a V when it came to restoring production. At that time, many of them cited the inherent uncertainties and the need to be cautious. Aramco, the Saudi oil company, subsequently surprised the vast majority of analysts with the speed with which it restored full production. This time around, the analysts — like the central banks — quickly mirrored the V market action notwithstanding what most would regard as even greater uncertainty.

Part of the growth reassurance that analysts were quick to provide may be due to the fact that the coronavirus outbreak did not produce a sudden stop like the one during the 2008 global financial crisis. But as I have argued earlier, this ignores a fundamental difference between financial sudden stops and economic ones.

Because they tend to impact the payments and settlement system, financial sudden stops are felt widely from day one. In contrast, economic sudden stops tend to be much more localized and then, over time, cascade gradually throughout the wider economy. That dynamic is playing out now.

The virus initially paralyzed economic activity in Wuhan province in China, where it first broke out, but it then disturbed both supply and demand within the rest of China and then outside it. Examples, which are multiplying by the day, include the collapse of sales in China and the decimation of Chinese tourism on the demand side and, on the supply side, the growing disruptions to global supply chains, which could soon force factories to shut down in Europe and elsewhere. Not surprisingly, a growing number of multinational companies are either suspending or reducing their earnings guidance, including Apple, which announced on Monday that it would not meet its revenue guidance because of both demand and supply issues — specifically a decline in Chinese demand and disruptions to the iPhone supply chain.

As long as this dynamic remains uninterrupted, the hope of a V growth recovery will give way to more discussion that the pattern may end up being more of a U, W or L. Should this materialize, the gap between ever-rising prices for risk assets and low volatility on the one hand, and even more sluggish fundamentals on the other, will become even more glaring. And a multiyear rally that once had three powerful engines — attractive valuations, hopes for sustainable better fundamentals and favorable technicals — will rely even more heavily on just one: technicals and, specifically, market confidence in the ability and willingness of central banks to provide ample and predictable liquidity that decouple finance from the real economy.  

Mohamed A. El-Erian is a Bloomberg Opinion columnist. He is the chief economic adviser at Allianz SE, the parent company of Pimco, where he served as CEO and co-CIO. He is president-elect of Queens' College, Cambridge, senior adviser at Gramercy and professor of practice at Wharton. His books include "The Only Game in Town" and "When Markets Collide."