With the recent relaxation of lockdown guidelines followed by mass reopening of a number of states, the nation’s daily new case tally is on the rise again. The last three months’ data had showed a slowdown in new cases, bringing a glimmer of hope. However, the past seven days’ data shows a record increase in the number of new cases.
The catastrophic impact of the pandemic on the financial market has already been widely compared with the great financial crisis of 2008. Though the full impact cannot be gauged at this stage, we can still conclude that the pandemic-led recession that the economy has experienced so far is much worse that the 2008 mayhem.
The IMF recently expressed deep concern about rising debt in the United States as well as other developed and emerging countries. The excessive numbers of fiscal stimulus packages that have been announced since March has resulted in public debt rising to more than 100% of combined GDP of these nations. On Jul 8, in an online meeting, IMF’s deputy managing director Mitsuhiro Furusawa called for post-pandemic worldwide economic reform stating, “Once the economy gets back on track, (a) medium to long-term fiscal framework must be created to manage public finances accordingly.”
Transition to New Normal
Whether or not an effective vaccine is launched soon, whether or not the outbreak proves to be the biggest economic disaster of modern-day history, this devastation has already started to alter the economy as a whole.
Addressing this transformation as the “new normal”, economists are currently widely talking about the gradually changing consumption-spending pattern of a rational individual, as well as of the entire social paradigm.
This transformation is approaching in the form of changing hygiene sense, eating habit, spending on luxury items, leisurely travel, religious inclination, and over and above notion of livelihood and lifestyle. For example, in this period, there has been a mass shift to careful shopping from extravagant spending earlier. One thing that is getting clearer by the day is that the changes are sweeping and happening fast.
Time for Investors to Act Fast
From an investor point of view, when equity volatility is ratcheting to an all-time high, the best strategy is to shuffle one's investment portfolio to suit the demands of this 'new normal'. At this point, investors can use selloffs within portfolio to pick stocks based on the changes.
Jim Cramer too recently noted this behavior-changing investment pattern to be incredibly lucrative and addressed these new normal themes as realistic and long lasting.
Three New Normal Trends to Bet On
Already a lot has been said on the growing prosperity of the digital health sector over the past few months as a major choice for contactless healthcare services. Despite the U.S. government’s measures to make both telemedicine and remote patient monitoring mainstream for the past few years, primarily to minimize healthcare cost and increase access of care, the sector struggled to receive mass acceptance. Nevertheless, post the COVID-19 outbreak, the situation has changed drastically. Telemedicine stocks received an impressive response, when in February, the Centers for Disease Control and Prevention asked healthcare service communities to increase the use of telemedicine in broader ways. Further, the FDA has approved the expanded use of remote patient monitoring technologies with the aim of minimizing hospital visits, thereby reducing the risk of exposure to the virus.
We believe, even when normalcy resumes, digital health stocks will keep gaining ground, banking on change in consumer spending toward more contactless services. Going by a Nielsen investigation report, consumer spending pattern has already transformed to ‘proactive health-minded buying’ with consumer interest growing toward products that support overall maintenance of health and wellness. Here we ask investors to add stocks like Teladoc Health, Inc. (TDOC - Free Report) . The stock currently carries a Zacks Rank #2 (Buy).
With consumers limiting their outdoor exposure, another thing that is changing from the core is the concept of education. Schools, universities as well as other learning institutes shutting down one after another for indefinite time periods is dragging the future of millions of children into uncertainty. This has led to the development of the learn-from-home concept. While e-learning can never substitute classroom teaching, many economists believe this virtual delivery of education, which has become a necessity now, will not fade away even after the mayhem disappears. According to Forbes (published in Fatbit Technologies article), the worldwide e-learning market is projected to be worth $325 billion in 2025. Here we ask investors to focus on Zoom Video Communications, Inc. (ZM - Free Report) , carrying a Zacks Rank of 1 (Strong Buy), with stellar growth prospects. You can see the complete list of today’s Zacks #1 Rank stocks here.
Another sector that has already started to gain significance amid current turbulence is e-commerce. When the mass lockdown began in April, consumers were seen fast shifting from offline to online shopping. Even when the brick-and-mortar stores started to open, a huge percentage of consumers stuck to online purchases. Amish Jani, a partner at venture capital firm FirstMark, believes that in the long term, online shopping will get a boost from the lifestyle changes currently being forced on consumers. And this change will be lasting. Zacks Rank #2 stock Amazon (AMZN - Free Report) is, undoubtedly, leading e-commerce stocks at this moment, banking on its expanded supply chain. We also ask investors to keep a track of stocks like Costco Wholesale (COST - Free Report) and Fiverr International (FVRR - Free Report) , both carrying a Zacks Rank of 2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>