Take The Opportunity Arising From Risks
The main and single factor was the coronavirus which is affected the global economy in the last month. In this period of staying at home, we examined the global economy.
It is obvious that the virus will deeply affect the growth of the world economy. China, which creates 16.3 percent of the world GDP, is also the 2nd largest global economy after the USA was caused the first damage to the economy. Economic risks can also easily be transmitted from one country to another just same as the epidemic. We have an outbreak that forces the whole world to act in unity. Morgan Stanley says that the global recession in 2020 is the “main problem” of firms. On the other hand, fears of the coronavirus’s impact on the global economy have shaken markets around the world, stock prices and bond returns have decreased. So which stocks break the storm?
When global travel, events and social gatherings get very close to a halt, it is obvious that this is not a good sign for a typical economy. However, it is not possible for everyone to lose at the same time. It is inevitable for some stocks to benefit from any crisis. Here are a few examples of Wall Street winners:
ZOOM VIDEO COMMUNICATIONS (ZM): The star of the video conferencing category is rising rapidly. Zoom is also among the brands that benefit most from this process, as companies switch to work remotely.
DOMINO’S PIZZA (DPZ): People who want to avoid crowds due to Covid-19, go home to order. Companies that focus on home service, such as Domino’s Pizza, turn the negative effect of the virus into gain.
CAMPBELL SOUP COMPANY (CPB): In the gloomy environment of the global view, individuals are going to stock up on ready-made food. Companies such as Campbell’s have an increasing market value.
THE CLOROX COMPANY (CLX): It is frequently repeated for experts that you need to wash your hands to prevent the spread of the coronavirus. Clorox strengthens economically with this interest in sanitary measures and cleanliness.
AMAZON (AMZN): Many consumers turn to the web to meet their needs during the coronavirus outbreak. This situation increased business volume of Amazon. Even company executive announced that they will hire 100,000 people to meet this need and cope with online orders.
90% of CFOs worried about economic stagnation!
According to PwC’s ‘Covid-19 CFO Pulse Survey’ data, consumer confidence, financial operations and labor productivity are considered to be negatively affected as the measures to slow the spread of the virus continue. The top three concerns of CFOs are economic stagnation, reduction in consumption and disruption in financial processes of institutions.
While diseases and outbreaks continue to affect life throughout history, a gradual decrease in mortality is noticeable. The developments in the field of health and determining the factors which spread the viruses, provides an advantage to fight with outbreaks and prevent to face with a high number of deaths as happened in the history. As we check the older epidemics in the history, they support these realities:
Spanish Flu / Date: 1918-1919 / Death: 40-50M
Asian Flu / Date: 1957-1958 / Death: 1.1M
Hong Kong Flu / Date: 1968-1970 / Death: 1M
HIV / Date: 1981-Active / Death: 25-35M
Swine Flu / Date: 2009-2010 / Death: 200,000
SARS / Date: 2002-2003 / Death: 770
Ebola / Date: 2014-2016 / Death: 11,000
MERS / Date: 2015-Active / Death: 850
COVID-19 / 2019-Active / Death: 258,000 (5th May 2020 data: wikipedia)
We suggest; trust to improvements on treatment but also be ready for the worst case scenario and do not forget to take the opportunity arising from risks.
