Coronavirus impact on the stock markets

COVID-19, also known as the Novel Coronavirus has only been around for 2-3 months but it has already taken a massive chunk out of the global economy. A once unknown virus in a relatively small city in China is now causing multiple countries to go on complete lockdown, prevent their citizens from going to work and forcing millions, if not billions of people to stay at home and hope for the best.

Naturally, due to such a huge lack in workforce, the world is not able to produce as much as it used to, thus causing a major decrease in investor confidence in the market. The US economy is a primary example of and is getting worse day by day.

According to this Coronavirus map , it’s not getting better either. Although China has managed to relatively stabilize the situation, Europe and North America (mostly the USA) are just now experiencing a massive outbreak, thus guaranteeing the stock market’s fall for the foreseeable future.

However, not everything is doom and gloom. Not every company is on its way to bankruptcy or a tight spot on the market, there are some that are a hidden gem for investors to flock to. Let’s try and find at least 5 of these companies to rely on.

Disney: the digital giant

This may be quite a weird choice for most, as Disney ( NASDAQ: DIS ) has shut down multiple theme parks, cruise ships, studios and movie theatres. These are considered to be quite a large part of the company’s revenue, slightly less than 50% actually.

However, the main advantage of Disney is that they own a huge chunk of the US media space, making them one of the best contenders to survive this market drop. Take into account multiple Television Networks and Cable Channels that Disney owns. There will be millions, even tens of millions of people bringing traffic to these channels while remaining home with quite a lot of time on their hands.

In the past, these two segments of the company were responsible for about 36% of the yearly revenue, meaning that they are simply going to become a much larger contributor during the quarantine.
Don’t forget about Disney+ as well, a subscription-based streaming service that had an amazingly successful debut thanks to multiple amazing shows. This segment of Disney is sure to shine during the quarantine as well.

Overall, Disney still has multiple sources of revenue that it can rely on. In fact, most of their costs through cruise ships, hotels and theme parks are completely gone, thus giving the company more space to invest in its digital platforms, solidifying its revenue even further.

On February 4th, Disney peaked slightly before the COVID-19 Pandemic began at US$144.73, now it is down to US$83.10 per share, meaning that there is a chance to see a 100% rebound once the Pandemic is over. And knowing Disney, it will most definitely manage this.

Amazon: the global supplier

The beginning of the Pandemic was a disaster for Amazon ( NASDAQ:AMZN ). Knowing how large of a demand the company would have, they had to prepare themselves immediately, which they failed to do. Workers were demanding to be let go to their homes to avoid contamination, thus delaying orders.

This caused Amazon to go from $2170.22 per share to $1676.61 in just under a month. But thanks to Bezos approving higher compensation for overtime and overall better compensation for workers that remained in the warehouses, orders quickly started flowing as they were supposed to.

Now that Amazon is back on its feet, the stock price has rebound to around $1845 proving that there is still hope. But due to an anticipated worsening situation in the US, it could still fall considerably, but remain within rebound metrics.

Amazon is now the bread and butter of the average American household. Ordering everything in bulk in order to prepare for the pandemic, thus guaranteeing Amazon’s revenue throughout the quarantine. The stocks may remain low for now, but once the company announces its profits at the end of Q1 it could rebound back to its original price in February, and maybe even higher.

Apple: hard fall means an even harder rise

Next up is Apple ( NASDAQ:AAPL ), which may seem like a silly choice. Most of the company’s factories are currently closed in order to prevent any further spread of the virus. This means that Apple simply cannot produce any more devices in order to meet the demand that the lockdown is guaranteed to provide.

However, here’s the catch. With Apple being a blue-chip stock, it is pretty much guaranteed that it will see a serious rebound once the dust has settled.
The company has yet to see the true potential of the new Macbook Pro 16-inch sales. And with the Macbook Pro 14-inch (allegedly) and a new Macbook Air on the way, it is guaranteed to beat sales of several previous years.

Don’t forget that a new iPhone is in the making as well, painting Apple as a real safe haven for every investor hoping to profit off-of COVID-19.

Alphabet: the governor of the Internet

Alphabet ( NASDAQ:GOOGL ) is known for some of the most useful brands for any internet surfer. The likes of Google and YouTube are sure to be one of the most traffic-heavy websites in the coming weeks, but would most likely not be enough to keep the company’s stock prices afloat for too long.

As advertisers would definitely benefit from the increased traffic on these platforms, it’s still unlikely for them to place orders due to their own issues of delivering their own services. It’s expected for ad revenue to be down on Google and YouTube despite the increase in traffic.

Considerin that Alphabet has made nearly 80% or more of its revenue over the last few years through advertising, it’s obvious that the company’s stock is going to suffer further into the quarantine. However, being a blue-chip stock, it’s likely for Google and YouTube to compensate for lost money over the last few weeks.

Alphabet is one of the few large companies which is quite iffy in this situation. Should companies pull back their ads due to delivery issues, Alphabet will have to compromise with lower prices. But should advertisers flock to Google and YouTube due to increased traffic, Alphabet may be a perfect safe-haven for those focusing on keeping what they have rather than yearning for more.

Zoom: Digital communication

Zoom ( NASDAQ:ZOOM ) used to be a relatively well-known team communication software that not too many companies were using for remote workers or freelancers. However, the software became one of the most important resources during the Novel Coronavirus outbreak.

As companies, universities, and schools went over to digital communication, a program that could fit dozens or hundreds of people was required. Very few programs were up to the task, but Zoom somehow managed to squeeze in and take the market by storm.

Even if we take a look at the stock price, it is obvious that the popularity of this company has exploded . Near the end of January, when the world was slowly but surely starting to understand how serious Coronavirus was, the company’s stocks were at $70.44 per share. Now that the whole world is working or studying from home, the price has exploded to $158.65. That’s more than a 100% gain within just two months.

You may be thinking that it’s way too late to invest in this company now that it has peaked. But there is very little reason to believe it did. You see, the United States is just now starting to quarantine whole cities. Asking people to stay and work from home, while Europe is already in the midst of it. The most lucrative markets are just now starting to utilize this software, which means that investor confidence is simply going to start increasing. Although the whole world is using the 40-minute free version right now. It’s only a matter of time before unlimited options are purchased all over the globe, thus earning Zoom much more than investor confidence.

Furthermore, we know that COVID-19 is here to stay for the next couple of months, or at least it’s here enough to force people to work from home. Once this happens Zoom is going to see a major fall in its user base, thus a fall in the stock price. If there’s ever a time to invest in this company, it is right now.

It is a matter of when than if?

The market rebound is almost guaranteed. Do not forget that neither of these companies has lost any of their raw resources, nor their real estate. Absolutely nothing is gone besides the workforce.

In fact, this was a nice lesson for most investors to realize that a big chunk of the value in a company comes from its employees. Once the Coronavirus passes by and people go back to their jobs, the market will immediately correct itself.

Remember, nothing has been lost, all of the resources required to make what these companies make are still there.

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