I’m already exhausted trying to keep track of the market this week. The word coronavirus is beginning to lose all meaning as it reverberates around my head. At this stage, I wish I was a Robinhood user and had an excuse to just sit on the sidelines.
Markets shot up Monday in anticipation of the Fed cutting interest rates. The next day, the Fed duly obliged, cutting them by half a percent, and the market over-reacts to the Fed’s over-reaction, sending it plummeting Tuesday. We then saw a 4% jump on Wednesday because that’s just what happens in this new market where logic no longer exists, and to cap it all off, we’ve got Joe Biden’s big Super Tuesday performance sending health-care stocks soaring over the speculation of the sheer amount of elixirs and potions it would take to keep an 82-year-old functioning in the most important job in the world. Also Obamacare, but I’m pretty sure the former is the bigger factor.
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So instead of trying to make sense of drastic swings which are now an everyday occurrence, I’m going to try and identify a few stocks that may be immune to the effects of the Coronavirus.
Slack (NYSE: WORK) is coming up on a year as a public company and it has been an interesting journey. Entering the market via a direct listing, the company had a lot of hype behind it. However, it didn’t exactly go swimmingly for the workplace collaboration platform, with intense competition arising from Microsoft (NASDAQ: MSFT) in the form of their Teams offering and the stock losing more than 50% in value.
“Tis but a scratch”, announced Sir Stewart Butterfield the Black Knight, as the stock has been surging recently. Up 35% since late January, companies like Uber (NYSE: UBER) and IBM (NASDAQ: IBM) have implemented Slack company-wide as their office communication platform. In a time when we see working remotely as a necessity in many companies, office collaboration software is going to become a vital industry. Case and point, here in Dublin this week we saw Google’s (NASDAQ: GOOG) offices implore every one of their 8,000 strong staff to work from home as a trial. As the coronavirus continues to spread, more and more workplaces will opt for the same, showcasing the importance of Slack’s software.
Slack is up just over 1% since the 19th of February when the market began its correction.
No marks for picking the company that allows you to avoid hospitals and doctor’s offices at a time of a global epidemic, but I can hardly make a list like this without mentioning Teladoc (NYSE: TDOC). Much like Slack, this outbreak will bring into focus the importance of the telemedicine industry. As the pioneer and leader of the industry, Teladoc looks set to benefit. A look at their six-month chart brings a tear to my eye as I look at one of the few stocks in my personal portfolio immune to the severe swings and roundabouts that dictate the stock market we now live in.
One of the darlings of our MyWallSt showroom, it has been on the rise since coronavirus-mania first gripped the market, up more than 6% since the market began to dip.
When we think of competitors to Netflix (NASDAQ: NFLX), we think of the heavy hitters, Disney+ (NYSE: DIS), Amazon (NASDAQ: AMZN) Prime, and Apple (NASDAQ: AAPL) TV+. The streaming market is home to some of the biggest companies in the world, battling it out to take Netflix’s spot as the top dog. But do you know what are actually Netflix’s actual biggest competitors? Well according to Reed Hastings, Netflix CEO, it’s sleep, and according to me, random blogger, it’s leaving the house.
This poll from Morning Consult is a stark reminder of the effect a widespread outbreak of the Coronavirus could have on the U.S. economy. It is also conjuring up cartoon dollar signs and cash register sound effects for Netflix shareholders.
A prolonged outbreak will inevitably spark an uptake in streaming figures and subscriptions for Reed Hastings & Co. Netflix stock is down less than 1% since the dip began two weeks ago.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Apple, Microsoft, Slack, Teladoc, Netflix, and Amazon. Read our full disclosure policy here.
Content Manager at MyWallSt
Michael's first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.