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Sunday, May 9, 2021

Re-Allocating Investments for a Post-Covid World

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The following is a summary from The Post-Covid Industry Forecast report. To access the full PDF, please click here

The obvious immediate impacts of COVID-19, which the U.S. Government is trying to mitigate through a series of legislation, are:

  • About one in five people in the United States have lost working hours or jobs, and documented unemployment is over 15%
  • Hotels are empty, tourism has stopped
  • Airlines are operating at 5-10% of capacity awaiting billions in government support as 70% of the world airline feet is now parked
  • Almost all Retail Stores are closed in most of the U.S., as 50 state governors roll out their states’ phased reopening plans
  • Restaurants and 300,000 other small businesses are closed, surviving for a month or two on billions in government support

Consumer spending, which drives the U.S. economy, has been hit hard by the pandemic, with the exception of very few areas where spending supports the 200 million Americans now at home.

The Consumer spending winners of the shelter-in-place environment have been Delivery Services like Amazon (AMZN), Media and Streaming like Netflix (NASDAQ:NFLX) (NFLX) and Disney (DIS), Gaming like Activision-Blizzard (ATVI), Liquor, Warehouse Clubs, Online Grocery and, surprisingly, Supermarkets, where a large hoarding trend dominated shoppers’ buying decisions at the start of the pandemic.

Over the long term, New Economy Models will evolve to become the new normal in three broad areas of Consumer Non-Durables: retailing, airlines, and hospitality. The marketing departments in these sectors and industries have already begun attempting to win back customers by implementing social distancing measures, which reduce capacity and increase the cost to provide services and by offering low price giveaways to overcome their customers’ fear of contracting COVID-19.

This is an excerpt from Zacks Chief Strategist John Blank’s full May Market Strategy report To access the full PDF, click here.

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