World wide panic. Effect on our stocks?
My daughter is in Beijing. She has sent videos of empty streets. Almost no pedestrians (everyone is sitting in their apartments, cowering), few cars on the road, universities closed although the holiday is over, stores closed, restaurants closed, apartment complexes barricaded with security guards and signs saying that “No one who has been outside the City will be allowed back in to the apartment complex.” (I kid you not! Lots of signs like that). People call out for deliveries of food but the delivery guy has to stay at the barricade and people have to go down to the barricade to get their order. In other words Beijing is shut down. I imagine much of China is like that. Chinese tourists are barred from most countries. International commerce around China must be hugely down. We have a worldwide and national maximum health alert. You can’t find facemasks in pharmacies in the US, although there are only six well-contained cases in the entire US, and zero in NY City, where they are also out of facemasks. This is a maximum panic!
Which companies will that effect and how will it affect our stocks? Especially if, (or when), it spreads. Remember, however, that this will all be temporary (six months maximum, I would think, for a viral outbreak like this).
Tourism will be way down. Hotels that cater to Chinese tourists (there are a lot of them) will see huge drop-offs in revenue, but hotels in general will be down, as well as all kinds of tourism. Decreased travel in general will also mean hotels will be down. Entertainment involving large gatherings of people will be down (concerts, athletic events, etc). Restaurants will see a drop-off as well. Airlines ditto. More home delivery will probably be good for Amazon, but retail in general will probably see a fall-off in revenue.
Our companies: Square might be hurt temporarily if farmers markets are closed or less attended, and retail in general down. Trade Desk might or might not be hurt by a slowing of retail (maybe why it was up so little this month compared to the rest of our stocks). Trade Desk is also trying to expand into China and that will come to a temporary halt.
I can’t see much, or even any, effect on Alteryx, Crowd, Datadog, Okta. Coupa might see new customers lag and anything based on total volume of underlying sales may decrease. Zoom may zoom, actually see a considerable benefit, as companies will prefer remote conferencing with no need for travel, and especially with no chance for contagion.
THIS NEXT PART IS OFF-TOPIC, SO PLEASE DON’T RESPOND TO IT ON THE BOARD. If you have something you just have to say, send me an off-board response.
How crazy is this panic? Well, 12,000 cases worldwide and 250+ deaths, comes out to a 2% death rate, and largely in people whose health was already compromised. The death rate may be less than that as there are apparently mild cases that don’t even get to a doctor. Spain’s first case reported this morning from the Canary Islands involves a German tourist who wasn’t even sick but just tested positive for coronavirus. This isn’t the Black Death folks, or Small Pox, or Ebola (which has a 50% to 90% death rate), or even measles which is much more contagious than any of them.
To put it in perspective, there are six cases of coronavirus in the U.S. and no deaths, and yet we have a maximum health alert. There were articles in the NY Times and Washington Post comparing coronavirus to Influenza, which in the last four months (the flu season so far), has infected in the range of 20 million people in the U.S. and killed in the range of 20 thousand people. Yes, you read that right, KILLED!
In the particularly severe 2017 flu season, there were 61,000 deaths in the U.S. from flu!!! Yes, 61,000!!! All these figures are U.S. alone. And it hardly gets a mention in the news, and nobody goes out and hoards masks, and no one worries about traveling, and lots of people don’t bother getting their flu shots. Granted, the death rate per infection is a lot lower than the 2% from coronavirus, but 61,000 deaths in the U.S. in a year is a lot to ignore and not get a flu shot.
Just compare that 61,000 deaths from flu in the U.S. with no outcry at all, with less than 300 coronavirus deaths in China (diluted into one billion, four hundred thousand people, four times the U.S. population), and you have to wonder whether the world is going crazy, or whether panic just spreads.