Every Industry Group Gets Punished By A Pandemic

Everywhere you look people are worried about the current case of coronavirus. The virus that started in China has now spread to Europe, North America, South America, Africa, and Australia. Unless you are willing to move to Antarctica you could be affected by this virus in one way or another. There have been many past pandemics throughout history, so we really do not know how bad the coronavirus will be or where it will rank in the list of pandemics. At this time, the coronavirus is simply just to new to understand how bad it will actually become.

The global stock markets have declined sharply since this virus has spread around the world. The lack of solid information about the coronavirus has really hurt stocks. Fear of the unknown is always a sure catalyst for stock market selling pressure. In this current stock market, the baby has been thrown out with the bathwater. Almost every asset class has seen selling pressure. In fact, the Dow Jones Industrial Average (DJIA) has just seen its fastest 10% decline in history. Currently, there seem like there are very few places to hide.

In this environment, investors have very few options when it comes to parking their money. The bond funds have seen a lot of hot money recently. The iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) just made an all-time high yesterday. The popular TLT traded as high as $159.70 a share as investors run to a safe haven. At this time, the TLT is extremely overbought and extended on the charts. Other equities that have rallied higher include stocks such as Zoom Video Communications Inc (NASDAQ: ZM), Netflix Inc (NASDAQ: NFLX) and some hot biotechnology stocks that could possibly develop a vaccine for the virus in the future. Outside of this small group of equities, most stocks have declined sharply lower. Basically, there is very few places you can hide in a global pandemic. In the past, pharma and consumer goods stocks have been safe havens. After all, people will still need to have medications no matter what is going on in the world. Toilet paper and soap are always needed as well, so these are two industry groups that could be played in a pandemic.