U.S. Sanitation Stocks Clean Up As Coronavirus Health Concerns Spike

Hooper noted that compared to SARS in 2003, “expectations this time are for a stronger, more negative impact toward the beginning stages, as new cases should peak in this quarter,” while the number of new infections are likely to moderate starting sometime in Q2, as China’s and other government’s remediation responses have been “swifter and much more transparent than in 2003.”

Hooper continued that as the number of new infections moderates — “and as consumption returns and positive impacts of the Phase 1 trade deal work their way through positive corporate and consumer sentiment — we think that a rebound in economic activity will start to occur by the end of the second quarter, which should continue into a more powerful recovery in the third quarter.

“While more stock market volatility is likely, we expect the market to rebound in advance of an improvement in economic activity, especially given that both China and the Federal Reserve (Fed) stand ready to provide stimulus as necessary.”

Overall, risk appetite had returned to the financial markets Tuesday, following liquidity injections and other policy measures by the People’s Bank of China, as well as other Chinese government agencies, to contain any adverse impacts from the coronavirus on its – and the global economy.

Meanwhile, the relatively small number of domestic 2019-nCoV cases currently under investigation has spurred other analysts to anticipate an overall muted impact on certain U.S. corporate sectors.

Fitch Ratings, for instance, recently noted it does not yet expect the virus to have a material adverse effect on the operating performance, or overall credit profile, of U.S. health insurers.

Cleaning-up

Against this backdrop, many U.S.-based companies have been touting the necessity of their products to help ward-off contagion from the respiratory illness, amid ongoing headline-stoked fears about its outbreak and victim count.

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Disclosure: The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the ...

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