Coronavirus Causes Stock Market Shake-Up & Opportunity
They say that every failure is an opportunity. That translates well to the stock market. While the coronavirus (also known as COVID-19) is largely causing share prices to fall, there are a number of companies that are poised to see huge gains from the coronavirus.
Below I’ll tackle the top three “coronavirus stocks” that are poised to see huge gains in the wake of the epidemic. But first some background.
The coronavirus has been making headlines around the globe recently. With thousands of infections worldwide (though the virus is primarily contained in China at the moment), concern is building over a possible pandemic causing havoc around the world.
And that havoc could translate to markets dipping or collapsing.
That’s the worst-case scenario, financially speaking. I’ve gone on record, however, saying I think the concern surrounding the coronavirus could be premature.
Consider that so many pandemics of the past failed to live up to the world-ending proclamations that many people had made.
Swine flu, SARS, Ebola… each had its day in the media sun, scaring people and making them believe that the world was ending. But each outbreak came and went. Yes, of course they were devastating to those affected, but ultimately society did not collapse and the death tolls didn’t reach anywhere near Spanish Influenza levels.
We’ve seen this show several times before and it’s best not to get too worried before we have the facts.
But people, especially investors, are not always known for making cool-headed decisions at all times. That’s a huge reason why we’re seeing the sell-off in the stock market right now: fear.
People are afraid, and when they’re afraid they act rashly. In this case, causing markets to fall.
But here’s the thing: this could be a huge mistake. If the coronavirus turns out to be another false alarm of sorts, we could anticipate the stock market to make a huge comeback in the coming days and weeks.
You don’t have to look far to find doomsayers. Scott Minerd, chief information officer of the global investment firm Guggenheim Partners, LLC, is one such person.
Minerd said the economic harm from the coronavirus outbreak could be “worse than the financial crisis.” (Source: “Coronavirus Fallout Could Be Worse Than the Financial Crisis,” Axios, February 28, 2019.)
It’s worth noting that Minerd is a member of the New York Federal Reserve’s investor advisory committee, and he said officials had contacted him to create “some sort of monetary coordination.”
On March 3, the U.S. Federal Reserve cut its interest rate by half a percentage point. Other central banks are also likely planning to cut interest rates and/or provide other types of financial stimulus.
So what we’re seeing here is a lot of consternation about COVID-19, but without having all the facts. That provides a lot of opportunity for investors to make a healthy dollar on the upswing.
Top Three Coronavirus Stocks
Another investment opportunity is to profit from the companies that are tackling the coronavirus in some way. And that brings us to the top three stocks that are poised to benefit from the coronavirus.
The first company on this list is, as of right now, the closest to getting a coronavirus vaccine to market: Moderna Inc (NASDAQ:MRNA).
The U.S.-based pharmaceutical company was the first to submit a potential COVID-19 vaccine to U.S. researchers for testing. (Source: “Biotech Company Moderna Says its Coronavirus Vaccine Is Ready for First Tests,” CNN, February 26, 2020.)
Its share price rose by more than 20% by early afternoon on February 26 after the news was announced.
The coronavirus, however, creating such a volatile and speculative market, meant that MRNA stock was bound to fluctuate after the news was released. And that’s just what has happened.
Still, the overall impression is that Moderna stock is rising and won’t subside anytime soon. The stock has surged by nearly 50% over the past month, with virtually all of those gains thanks to its possible coronavirus vaccine.
The company was able to develop the vaccine in just six weeks, but this is the pharmaceutical industry; we may be waiting months upon months for testing and trials to be completed before the vaccine can be released to the public.
All that being said, MRNA stock is on the rise and we’re seeing the potential for this pharmaceutical stock to see huge growth in the coming months if the coronavirus turns out to be as devastating as some predict it will be.
On the flip side, there’ s a lot of speculative money that could be made from Moderna stock, as the media will certainly continue to focus on COVID-19 for the foreseeable future.
Gilead Sciences Stock
Moderna isn’t the only company aiming to turn the search for a coronavirus treatment into profits. Shares of Gilead Sciences, Inc. (NASDAQ:GILD) went up following news that the company’s drug “remdesivir” is showing signs that it may be able to treat coronavirus.
An official at the World Health Organization (WHO) has lent solid credibility to the company’s hopes to combat the disease.
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