Here, we look at 13 stock picks that are being hammered by the coronavirus outbreak. These stocks might be best avoided until a clearer picture of the coronavirus's eventual fallout develops. But they eventually might be extremely attractive buy-the-dip prospects.
Airline stocks such as Delta Air Lines (DAL (opens in new tab), $48.19) and United Airlines (UAL (opens in new tab), $64.94) have delivered mostly flat stock performance over the past few years. However, they were already in value territory to begin 2020, and their stocks are getting even cheaper as travel fears mount.
Wuhan coronavirus fears hit stocks hard
Worry about these outcomes have already weighed on UAL (-26% in 2020) and DAL (-18%), and might continue to drag their shares down. But there are reasons to like airline stocks once the coronavirus danger has subsided. Lower fuel costs, rising fees and overall higher ticket prices have been improving many airlines' financial situations.
Fears that the coronavirus could disrupt travel and commerce and slow economic growth sent a chill through global risk markets, hitting Asian stocks hard, depressing copper and oil prices, and sending investors into safe havens, such as U.S. Treasurys and German bunds.
Fears that China's latest coronavirus could disrupt travel and commerce, and slow economic growth sent a chill through global risk markets, hitting Asian stocks hard, depressing copper and oil prices, and sending investors into safe havens like U.S. Treasurys and German bunds.
Topline: U.S. stocks bounced back on Tuesday, following their worst losses in months yesterday, as Wall Street investors continue to wrestle with lingering fears over the spreading coronavirus and its impact on the global economy.
By Reuters: The coronavirus scare has wiped $1.2 trillion from global stock markets in the last two weeks as new cases of the deadly virus multiplied, stoking fears of an economic slowdown spreading from its Chinese epicenter to the rest of the world.
Apple is the company most mentioned in the news alongside the coronavirus. It has 5x more news volume than the next company International Airlines Group (IAG). Also, 4 of the top 10 stocks in the ranking are airlines.
Ultimately, from 24 to 28 February, stock markets globally plummeted several percentage points, while on Wall Street the indices were down at least 10%.[105] It was the fastest correction in market history from all-time high, taking merely six days to enter into correction territory.[106] The sudden drop in late February was attributed to fears that China could produce a global economic shock, primarily due to quarantines imposed by the state to combat the COVID-19 pandemic, which at the time was classified as an epidemic.[107] Within weeks, stocks fell sufficiently enough to enter bear market territory.[108] Concerning reports of the viruses spread in South Korea, Italy and Iran also prompted fear in investors, mounting to a mass sell-off in Asia-Pacific stock markets as well as European ones.[109]
President Trump tried to downplay fears of the virus and of an economic downturn during a briefing Wednesday evening, saying the risk to Americans "remains very low." Mr. Trump also announced that Vice President Mike Pence would lead the administration's coronavirus response efforts, though he emphasized that Pence isn't a coronavirus czar.
President Trump will be holding a news conference at 6:30 p.m. ET Wednesday with officials from his coronavirus task force as he and his administration seek to reassure the public and the markets. Stocks suffered two days of steep losses on fears about the virus' economic impact, and the president accused news outlets of stoking panic.
Stocks regained some ground in early trading Wednesday following a two-day rout sparked by fears that the widening coronavirus outbreak could stall global economic growth. President Donald Trump suggested that fears of the disease are overblown, tweeting that the "USA is in great shape."
President Trump accused news outlets Wednesday of stoking panic over the coronavirus outbreak as global stock markets sunk for the third day in a row on fears of the disease. A day after the CDC warned Americans to prepare for what it said was the almost certain community spread of COVID-19 in the U.S., Mr. Trump insisted the country was "in great shape!"
Bloomberg:Hong Kong to Quarantine Travelers; Almost 500 Dead: Virus UpdateThe death toll from the coronavirus outbreak climbed toward 500 as confirmed cases worldwide reached almost 25,000. Hong Kong announced plans to quarantine travelers coming from the mainland, while thousands remained stuck on cruise ships. Japan said 10 people on a cruise liner tested positive for the disease. In Hong Kong, 3,600 passengers and crew from another ship were quarantined after three travelers were found to have the virus.Meanwhile, European stocks and U.S. futures rebounded following reports on possible vaccines and treatments. (Bloomberg News, 2/4)
Of course, valuation plays a part, too. In the decade after the financial crisis through the end of 2019, the US market surged and the S&P 500 delivered a cumulative total return of more than 250%. The MSCI China A Onshore Index rose by only 14% over the same period. As a result, the valuation of Chinese stocks simply was not anywhere near their US counterparts when the coronavirus crisis hit. The price/forward earnings ratio of the MSCI China A Onshore was 12.6x at the end of February, while the S&P 500 traded at 21.7x.
Last month, Wuhan was overwhelmed with thousands of new cases of coronavirus each day. But in a dramatic development that underscores just how much the outbreak has pivoted toward Europe and the United States, Chinese authorities said Thursday that the city and its surrounding province had no new cases to report. googletag.cmd.push(function() googletag.display('div-gpt-ad-1450190541376-1'); ); The news offered a rare glimmer of hope for the rest of the world as it battles the virus, and perhaps a lesson in the strict measures needed to halt its spread. It came as President Donald Trump likened the fight to "a war" and invoked emergency powers that allow him to compel manufacturers to deal with the pandemic.Wuhan was where the outbreak first took hold and thousands once lay sick or dying in hurriedly constructed hospitals. But Chinese authorities said Thursday that all 34 new cases recorded over the previous day had been imported from abroad."Today we have seen the dawn after so many days of hard effort," said Jiao Yahui, a senior inspector at the National Health Commission.Still, the virus continued to take its toll elsewhere, both human and economic. Stocks tumbled again on Wall Street on fears of a prolonged recession, falling so fast they triggered another automatic trading halt, while major U.S. auto manufacturers said they were shutting down their North American factories.Italy was on track to surpass China by Thursday in the number of deaths related to coronavirus, a gruesome milestone that is being blamed on a perfect storm of Italy's elderly population, its overwhelmed healthcare system and its delay in imposing a complete lockdown in the epicenter, Lombardy. A paramilitary police officer in a hazmat suit walks among pilgrims as he disinfects a tent built on a field where a mass congregation is supposed to be held in Gowa, South Sulawesi, Indonesia, Thursday, March 19, 2020. Indonesia halted the congregation of thousands of Muslim pilgrims and began quarantining and checking their health Thursday to prevent the spread of the new coronavirus. The vast majority of people recover from the new coronavirus. According to the World Health Organization, most people recover in about two to six weeks, depending on the severity of the illness. (AP Photo/Syaief) Elsewhere around the world, more borders shut, leaving some to wonder how they would get back home. In the Pacific, Australia and New Zealand shut out tourists, allowing only citizens and residents to return, while Fiji reported its first case, a worrying development in a region with poor healthcare.The U.S. and Canada both closed their borders to all but essential travel and Trump said he plans to assert extraordinary powers to immediately turn back to Mexico anyone who crosses over the southern border illegally.Russia and Mexico each reported their first death from the virus. Mexico closed its popular spring equinox visits to the Pyramids of the Sun and the Moon at Teotihuacan. (adsbygoogle = window.adsbygoogle []).push(); While China did not report any new cases in Wuhan or Hubei province it did record eight additional deaths.Jiao said the "double-zero" increase, which followed several days of improving numbers, meant their control and medical treatment methods were working well. People walk along the Las Vegas Strip devoid of the usual crowds after casinos were ordered to shut down due to the coronavirus outbreak, Wednesday, March 18, 2020, in Las Vegas. (AP Photo/John Locher) Wuhan has been under a strict lockdown since January. Officials are moving to loosen travel restrictions, but only inside the surrounding province of Hubei where most checkpoints will be taken down. Wuhan remains cut-off, with only those with special permission allowed to travel in or out.The lockdown will be lifted there only if no additional cases are reported for two consecutive weeks, which may happen next month, Li Lanjuan, a member of the Chinese Academy of Engineering, was quoted as saying.The improvement in China contrasted with the situation in Italy, where another 475 people died, bringing the death toll close to 3,000. Italy has the world's second oldest population after Japan and some 87% of those who have died have been over age 70.Italy is on pace to overtake China's approximately 3,250 dead when Thursday's figures are released. Iran has also been hit hard, with more than 1,100 deaths. A patient wears a protective face mask as she is loaded into an ambulance at The Brooklyn Hospital Center emergency room, Wednesday, March 18, 2020, in New York. Anticipating a spike in coronavirus patients, New York City-area hospitals are clearing out beds, setting up new spaces to triage patients and urging people with mild symptoms to consult health professionals by phone or video chat instead of flooding emergency rooms that could be overrun. (AP Photo/John Minchillo) The virus has infected more than 218,000 people worldwide and killed over 8,800. The United Nations warned that the crisis could lead to the loss of nearly 25 million jobs around the world.More than 84,000 people overall have recovered from the virus, which causes only mild or moderate symptoms such as fever and cough in most cases. Severe illness is more likely in the elderly and those with existing health problems.Though China still has the largest number of cases, most of its patients have recovered. China even sent medical supplies to hard-hit France, returning a favor done by the French weeks ago.Around the globe, governments took increasingly drastic measures to fight the epidemic and the threat of a recession, in some cases using emergency powers.Czech authorities used emergency powers to raid a warehouse and seize hundreds of thousands of face masks. And Hong Kong widened the use of electronic wristbands that monitor people under self-quarantine. Rio's Christ the Redeemer statue is lit up with the word Asia in support of those afflicted by the new coronavirus, in Rio de Janeiro, Brazil, Wednesday, March 18, 2020. For most people COVID-19 causes mild or moderate symptoms. For others, especially the elderly and people with existing health problems, it can cause many other serious illnesses, including pneumonia. (AP Photo/Silvia Izquierdo) In the U.S., the Dow Jones Industrial Average shed more than 1,300 points on Wednesday, or over 6%, and has now lost nearly all of the gains it had posted since Trump's inauguration. Oil dropped below $21 per barrel for the first time since 2002. Shares in Asia continued their slide on Thursday.The White House pressed Congress to swiftly pass a potentially $1 trillion rescue package to prop up the economy and speed relief checks to Americans in a matter of weeks.Calling himself a "wartime president," Trump invoked the Defense Production Act of 1950 to steer industrial output and overcome shortages of face masks, ventilators and other supplies as hospitals brace for an expected onslaught of cases.The Korean War-era law gives the president extraordinary authority to compel industries to expand production and turn out vital materials. A musician without clients looks out on parked trajineras, the painted wooden boats popular with tourists and Mexican revelers that usually ply the canals of the Xochimilco district, in Mexico City, Wednesday, March 18, 2020. Few visitors were present Wednesday afternoon, and gondoliers and food vendors said business had dropped significantly from the previous week. While Mexico is still reporting a little more than 100 cases of the new coronavirus nationwide, concern among the population is growing, with more people in the capital opting to stay home or avoid crowds. (AP Photo/Rebecca Blackwell) California's governor warned that martial law could be imposed. The mayor of New York said the city's 8.6 million residents should be prepared for a lockdown.Ford, General Motors and Fiat Chrysler, along with Honda and Toyota, said they will shut all of their factories in the U.S., Canada and Mexico. The closing of Detroit's Big Three alone will idle about 150,000 workers, who are likely to receive supplemental pay in addition to unemployment benefits.At GM's pickup truck assembly plant in Flint, Michigan, workers have been fearful since the virus surfaced in the U.S., said Tommy Wolikow, who has two young daughters."That's the thing that I was scared the most about, being the one to bring it home to them," he said.The U.S. has reported more than 9,400 coronavirus cases and at least 138 deaths, about half of them in Washington state, where dozens of residents from a suburban Seattle nursing home have died. A man wearing a mask goes past the Reserve Bank of Australia in Sydney, Thursday, March 19, 2020. Australia's central bank cut its benchmark interest rate by a quarter of a percentage point to a record low 0.25%, urgently seeking to alleviate economic shocks from the new coronavirus. (AP Photo/Rick Rycroft) A man is swabbed as he is tested for COVID-19 as vehicles line up at the Doris Ison Health Center, Wednesday, March 18, 2020, in Miami. The testing is being provided by Community Health of South Florida, Inc. According to the World Health Organization, most people recover in about two to six weeks, depending on the severity of the illness. (AP Photo/Lynne Sladky) Lawmakers wearing face masks as a precaution against the spread of COVID-19 attend a session in Congress, in Guatemala City, Wednesday, March 18, 2020. Guatemala's President Alejandro Giammattei delivered his emergency economic relief plan spurred by the coronavirus crisis. (AP Photo/Moises Castillo) Kelli Rizza cleans the bar before closing the doors of McSorley's Beach Pub at 5 o'clock on Tuesday, March 17, 2020, in Fort Lauderdale Fla. Florida Gov. Ron DeSantis, released a statement saying that all bars and nightclubs throughout Florida will close for the next 30 days. (AP Photo/Brynn Anderson) People walk by an electronic stock board of a securities firm in Tokyo, Thursday, March 19, 2020. Shares in Asia failed to hold onto opening gains on Thursday, skidding further after the latest selloff on Wall Street. (AP Photo/Koji Sasahara) Family members play darts on their patio as they self-quarantine in Barcelona, Spain, Wednesday, March 18, 2020. Spain will mobilize 200 billion euros or the equivalent to one fifth of the country's annual output in loans, credit guarantees and subsidies for workers and vulnerable citizens, Prime Minister Pedro Sanchez announced Tuesday. For some it can cause more severe illness. For most people, the new COVID-19 coronavirus causes only mild or moderate symptoms. (AP Photo/Felipe Dana) In this March 18, 2020 photo released by China's Xinhua News Agency, people applaud as departing medical workers enter Wuhan Tianhe International Airport in Wuhan in central China's Hubei Province. Last month, Wuhan was overwhelmed with thousands of new cases of coronavirus each day. But in a dramatic development that underscores just how much the outbreak has pivoted toward Europe and the United States, Chinese authorities said Thursday that the city and its surrounding province had no new cases to report. The virus causes only mild or moderate symptoms, such as fever and cough, for most people, but severe illness is more likely in the elderly and people with existing health problems. (Ke Hao/Xinhua via AP) In this March 18, 2020 photo, people stand in a spaced line as they wait to buy pork at the entrance gate of a closed residential community in Wuhan in central China's Hubei Province. Last month, Wuhan was overwhelmed with thousands of new cases of coronavirus each day. But in a dramatic development that underscores just how much the outbreak has pivoted toward Europe and the United States, Chinese authorities said Thursday that the city and its surrounding province had no new cases to report. The virus causes only mild or moderate symptoms, such as fever and cough, for most people, but severe illness is more likely in the elderly and people with existing health problems. (Chinatopix via AP) In this March 18, 2020 photo, people buy pork at the entrance gate of a closed residential community in Wuhan in central China's Hubei Province. Last month, Wuhan was overwhelmed with thousands of new cases of coronavirus each day. But in a dramatic development that underscores just how much the outbreak has pivoted toward Europe and the United States, Chinese authorities said Thursday that the city and its surrounding province had no new cases to report. The virus causes only mild or moderate symptoms, such as fever and cough, for most people, but severe illness is more likely in the elderly and people with existing health problems. (Chinatopix via AP) In this March 18, 2020 photo, people buy pork at the entrance gate of a closed residential community in Wuhan in central China's Hubei Province. Last month, Wuhan was overwhelmed with thousands of new cases of coronavirus each day. But in a dramatic development that underscores just how much the outbreak has pivoted toward Europe and the United States, Chinese authorities said Thursday that the city and its surrounding province had no new cases to report. The virus causes only mild or moderate symptoms, such as fever and cough, for most people, but severe illness is more likely in the elderly and people with existing health problems. (Chinatopix via AP) Scientists have no doubt the true number of people infected is higher than reported because of the possibility that many mild cases have gone unrecognized or unrecorded, and because of the lag in large-scale testing in the U.S.In the first breakdown of its kind in the U.S., the Centers for Disease Control and Prevention said that the nation's coronavirus deaths so far mirror what has been reported in other countries, with about 4 out of 5 fatalities occurring in people 65 and older, and no deaths in children. 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. 2ff7e9595c