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Swine flu and the stock market
(For the lastest news regarding swine flu and the stock market, please
scroll down to the news feed).
During the panic about Asian bird flu in 2005 and 2006, airline, hotel
groups, insurers, and oil companies stocks fell heavily, while shares in
drug, healthcare, and cleaning product businesses soared.
There’s still uncertainty around the swine flu situation. Uncertainty
however has proven to be a big stock market mover in the past year. Further,
even the slightest new information about such a potentially explosive issue
could have a significant effect on the markets. Here are some possibilities
in the short term.
Sectors That Could Be Hit Hard
* Transportation sector: Travel advisories and recommendations to stay
home won’t help transportation stocks; ETFs like IYT.
* Reduce travel and visits to retailers, movie theaters, restaurants, and
other public places.
* With recessionary pressures causing people to cut down on luxuries and
discretionary spending, the travel industry is in an especially vulnerable
position.
* An additional pullback from a flu scare will have a significant impact
on cruise line stocks more than hotel companies, according to Zacks Research
analyst Sean P. Smith, who thinks those in the worst position include Carnival
and Royal Caribbean (which both have close quarters and itineraries including
ports in Mexico.)
* Energy: Fewer people flying and traveling in general could cause weaker
overall demand for energy and crude oil funds; ETFs like USO.
* Equities in general: As we’ve seen in the past six months, a little
bit of uncertainty can go a long way towards causing equities to tank; ETFs
that index equities such as SPY and VTI.
Sectors That Could Get a Lift
* Pharma and Healthcare sectors: In anticipation of demand for vaccines
and health services, shares of pharmaceutical and healthcare companies could
appreciate; ETFs like IRY and IHE.
* Gold and Commodities: In the last year precious metal ETFs have been popular
buys on days when panic seemed to set in; ETFs like GLD and SLV.
* Treasuries: Similarly, a flight to safety away from equities could make
for inflows in bond funds thought to be very secure; ETFs like IEF and TIP.
* Industries that could benefit include those that deal in home entertainment,
If the current swine flu epidemic ends up infecting millions of people,
then global GDP could be adversely affected at a time when the global economy
is already in its worst recession in decades. If, however, the current epidemic
ends up being about as virulent as the SARS outbreak of 2003, then Mexico
will likely suffer a short-term economic setback but the overall effect
on global GDP is likely to be rather small.
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swine flu stock market - Google News
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Tue, 09 Mar 2010 13:45:05 GMT+00:00
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Mon, 01 Mar 2010 05:06:16 GMT+00:00
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Thu, 11 Feb 2010 03:15:23 GMT+00:00
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Thu, 04 Mar 2010 14:36:39 GMT+00:00
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Wed, 03 Mar 2010 11:30:30 GMT+00:00
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Tue, 09 Mar 2010 19:41:49 GMT+00:00
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Mon, 08 Mar 2010 09:06:46 GMT+00:00
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Thu, 11 Feb 2010 21:41:49 GMT+00:00
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Secrets of the Mexican WaveThe Big MoneyAnd while some investors saw a state on the brink following the outbreak of swine flu and sensationalistic headlines on drug-trafficking violence, ...and more » |
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Wed, 17 Feb 2010 07:06:04 GMT+00:00
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Thu, 25 Feb 2010 00:58:10 GMT+00:00
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