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Sector ETFs & Stocks to Gain/Lose on Coronavirus Outbreak

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Global markets turned wobbly at the outbreak of the deadly SARS-like coronavirus in China. Authorities in China reported on Monday that 139 new cases of coronavirus had been found over the weekend, according to Reuters. The disease has taken 9 lives in China to date.

With the Lunar New Year on Jan 25, fears of the spread of the disease have grown as millions of people will be traveling to and from China during this weened. To make matters worse, the United States has already confirmed its first case of coronavirus.

Asian stocks were hit hard as travel and commerce would get disrupted owing to the threat. Global markets took the cues and slumped in recent trading. Below we highlight a few ETF areas and stocks that could gain/lose from this outbreak.



No wonder, the event is likely to disrupt global air travel. U.S. Global Jets ETF JETS fell about 3% on Jan 21 with United Airlines Holdings, Inc. UAL shedding about 4.4%. American Airlines Group Inc. AAL and Delta Air Lines, Inc. DAL were off 4.2% and 2.7% on the day, respectively. Chinese airlines stocks like Air China and China Eastern were also hit hard.


Hotel and casino operators Las Vegas Sands Corp LVS and Wynn Resorts Ltd WYNN, both of which have considerable exposure to China, lost 5.4% and 6.1% on Jan 21. China Lodging Group Limited (HTHT - Free Report) lost 10.6% on Jan 21.

Apart from these China-centric hotel stocks, bid hoteliers like Marriott International, Inc. MAR (down 3.9% on Jan 21), Hyatt Hotels Corporation H (down 2.7%) and Civeo Corporation CVEO) (down 2.3%) also shed gains.

VanEck Vectors Gaming ETF BJK, which has 44.9% exposure to the United States and 13.4% focus on China, lost about 3.8% on Jan 21. Invesco Dynamic Leisure And Entertainment ETF PEJ) lost about 2.2% on Jan 21.


Per analysts, steel stocks have a sizable exposure to China. So, VanEck Vectors Steel ETF SLX lost 2.7% on Jan 21 with United States Steel Corporation UTX shedding 5.2%. Meanwhile, copper miners bore the brunt too as China is a huge consumer of copper. Global X Copper Miners ETF COPX lost 3.24% on Jan 21 (read: NAFTA Gone, USMCA In: ETFs in Focus).



Dow Jones U.S. Medical Equipment Index gained more than 0.5% on Jan 21. Such an outbreak has every reason to boost pharmaceutical stocks and shares of medical equipment like facemasks. Shares of Chinse face mask firms like Tianjin Teda and Shanghai Dragon rose heavily in recent trading (see all Health Care ETFs here).

Investors can thus have a look at SPDR S&P Health Care Equipment ETF XHE, VanEck Vectors Pharmaceutical ETF PPH and Global X MSCI China Health Care ETF CHIH.

ResMed Inc. RMD holds a major position as designer, manufacturer and distributor in the worldwide market for generators, masks and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders. The stock has a Zacks Rank #3 and belongs to a favorable Zacks industry (placed at the top 41% of 250+ industries).

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