As the coronavirus is continuing its march across the globe unabated with 174,000 infected and over 6,500 victims, the global economy is suffering its biggest shock and downturn in the last few decades.
From mid-February, the S&P 500 has shed 18% in value and the Dow Jones Industrial Average lost over 20% in just over a week. Multiple industries are being affected by the halt in production in mainland China and countries forced to shut their borders under quarantine are seeing their national economies fall.
As a result, tourism, aviation, entertainment and other industries are entering a prolonged period of recession. Since the start of the pandemic in January, aviation companies have been forced to close routes to affected countries. The International Air Transport Association has reported that losses for the industry would reach $63-$113 billion in 2020.
Opportunity For Growth
However, there are some industries that are benefiting from the pandemic, proving that a crisis is a combination of risk and opportunity. The multiple restrictions placed by the coronavirus outbreak on the populations are spurring demand for the products and services of companies catering to the new realities of life.
The pandemic has fostered a perfect environment for long-term investors as after the FTSE 100 lost 11.1% and the Dow Jones slumped by more than 12%, traders and financial market players are rushing to take advantage of the heightened volatility.
Among those companies that benefited the most from the coronavirus are biotech companies developing treatments for COVID-19, as well as pharmaceutical companies – Johnson & Johnson , Gilead Sciences Gilead Sciences , {{414|Sanofi }, MRNA, and Inovio Inovio .
Health companies are being grabbed up along with food producers as companies like Anthem, Amgen, Kellogg and Tyson Foods are seeing price increases just like gaming and communications services providers. The restrictive lifestyle is also spurring the growth of fast-food and delivery industries.
Pharma
The CEOs of the leading biopharmaceutical companies met with President Trump on March 2 on the issue of developing treatments for COVID-19, which led to an increase in the stock prices of Sanofi (PA:SASY), Gilead Sciences, Johnson & Johnson, GlaxoSmithKline , Pfizer Pfizer , and Regeneron Pharmaceuticals .
According to experts, stocks of smaller companies like Moderna, Inovio and Novavax are also increasingly gaining demand among investors given the market response to the Ebola outbreak several years ago. Meanwhile, Johnson & Johnson, {{14609|DiaSorin, and QGEN received funding by the Department of Health and Human Services.
Gilead Sciences, that earned $44 billion after having announced that it developed a treatment for HCV, had its stock price surged by 5.4% to its two years high of $80.22 and is continuing its rally amidst the news about its antiviral drug remdesivir’s positive effect on infected patients.
Moderna is tailing close behind. The company announced on February 24 that it successfully developed the first vaccine for COVID-19 and shipped the first batch for medical testing.
Such developments are boosting the capitalization of the pharmaceutical industry with lobbyists flushing over $8.3 billion into coronavirus spending. The measures are not only aimed at developing treatments, but are also a profit-making strategy. Drug companies are the beneficiaries of over 63% of all healthcare profits in the US alone thanks to over $259 million spent on lobbying in 2019 alone.
Mobile And streaming
Mobile and streaming services like Apple, Netflix , iQIYI , YouTube and Google (NASDAQ:GOOGL) are seeing boosts in stock prices as investors are scrambling to buy up shares before the deadline of May 2020, when the outbreak is predicted to end.
The App Store is expected to see a growing demand during the outbreak as consumers across the globe are spending more time on mobile games and apps.
Stocks of streaming service Netflix have been up by about 2% since February as people confined to their homes are spending on subscriptions. The company that has 167 million paying subscribers is now expecting this number to increase by almost 17% in the second quarter.
With the fear of mass gatherings cancelling concerts and other events, games like Plague Inc. and streaming services like Twitch and WeChat are seeing double-digit influxes of users. The Baidu Index shows that the term “gaming” peaked by 60% in under a week while gaming influencers are experiencing rises in audiences as isolated gamers are devoting more time to YouTube and video services.
Fitness Apps
The Health sections of GooglePlay Store and other marketplaces have seen a surge in popularity as users are rushing to seek preventative measures in light of the contagion.
For instance, Keep, the leading fitness app in China, whipped its tanking from 260 to 79 in popularity, rising by the day with hundreds of WeChat groups announcing the fitness sessions. The number of followers of the app rose by over 18% in the first five days since the viral outbreak and topped 258,000.
The at-home fitness provider Peloton is another example of the heightened demand for fitness and remote health monitoring as its shares jumped by 12% since the start of the outbreak.
Teleconference apps
ZOOM, Cisco , TeamViewer and other apps that facilitate corporate interaction in remote working environments have also been winning in light of the restrictive measures that are confining employees to their homes and preventing travel.
Zoom Communications has seen its shares soar by 11% as multiple businesses are switching to remote work. Zoom’s video conferencing, online meeting and chat software has seen a 10% rise in users, despite the fact that most are not resorting to paid versions of the program.
TeamViewer’s private equity investor Permira is capitalizing on the increased demand for remote services and has decided to sell an 11% stake worth $781 million to profiteer from the situation.
Network equipment manufacturers are also seeing gains as Cisco’s Webex received a 22 times increase in traffic in China for remote computer access. The number of Webex users in South Korea, Japan and Singapore has grown four to five times.
Debrief is another company that has experienced heightened demand trying to keep businesses operational and people working to prevent a global shutdown. Its founder Jeff Pulver, who previously founded $3 billion Vonage and made possible today’s usage of such apps like FaceTime and Whatsapp for free, found a way to offer businesses and private users a way to communicate without leaving their homes.
The Debrief DApp provides HD video conferencing, P2P audio and video calling, messaging, and decentralized file storage, making it a universal instrument for employees seeking to work from the comfort of their homes with no loss of functionality.
“We believe that the companies that offer the services that help people interact with the world without leaving home will win instead of suffering financial losses. That’s why we are working on the technologies that allow users to ensure maximum efficiency of business processes, regardless of whether employees are in one open space or work remotely,” Pulver said.
The Gold Industry
Goldgrew since the beginning of the year by around 10%, never being able to gain a foothold above $1,600 per ounce. Price manipulation by China is keeping prices from inflating under fears of panic, which would have skyrocketed prices to $1,900 per troy ounce.
The impact on the economy from a panic effect would be the collapse in the stock markets of Asian countries, which would have a snowball effect on the rest of the world. Though gold is currently hovering steady at $1,550, investors are expecting new highs and are eager to buy up the asset at every pullback.
In particular, GOLD, one of the leading players on the gold stocks market, rang up revenue of $2.88 billion in its laters financial report, up over 51% year-over-year.
Sanitary products
Purell, Lysol, CLX, and other disinfectant products producers are experiencing an unprecedented demand for their products as Americans are buying up hand sanitizers, cleaning wipes and other disinfectants at a record pace.
To be more precise, consumer demand for hand sanitizers has seen an increase of 1,400% from December to January as Walmarts, pharmacies and other retailers are claiming to have empty stocks. Bottles of Purell are now unavailable even on Amazon (NASDAQ:AMZN) or are being sold for hundreds of dollars.
Bloomreach reported that sales of hand sanitizers rose by 420%, Clorox wipes soared by 184%, disinfectants saw a 178% increase, and hand soap received a 33% boost in sales, among other sanitation products.
Though sanitizers are becoming a near-contraband grade product in light of shortages, many analysts are stating that prices are being inflated purely on grounds of profiteering speculation and stocks are actually full.