The Bright Side of Coronavirus
By Wed, Feb 5, 2020
Hey Scoopers,
The stock market was up again, and it seems that the traces of coronavirus hysteria are hiding in the shadow of election-related chaos. It makes you wonder if you can ever trust the market sentiment — more on that in the “Overall Market” section.
Beyond the overall market, while coffee in China is hot again, investors moved on from online dating — more on that in the “What’s Up?” and “What’s Down?” sections.
Oh, and by the way, is there any company that is benefiting from coronavirus? — more on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:Market Recap
- U.S. markets: All three indices agreed on the direction and finished Tuesday in the green. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: For one more day, the above $9,000 mark was the new norm for Bitcoin’s price
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What’s next?
JTNDaW1nJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZtZWRpYS5naXBoeS5jb20lMkZtZWRpYSUyRmhzTzJnaVdZcmhIb2pUNXgwOSUyRmdpcGh5LmdpZiUyMiUzRQ==For one more day, the Nasdaq led the market with more than 2% gain. The S&P and the Dow didn’t fall behind too much either. Both finished Tuesday more than 1% higher than where they started it.
On the surface, there are no more traces of coronavirus worries. However, dig a bit deeper, and the effect of the virus is still creeping into the news. For example, consider the impact of coronavirus on the result of phase one deal of the U.S.-China trade agreement. The travel ban to the U.S. will delay the export “boom” the U.S. administration had expected from the trade deal.
Aside from that, it is interesting to observe how the media and the market flow from one hysteria to the next in a matter of hours. The doom and gloom around coronavirus got replaced with the IOWA election-related chaos. And, just like that, we moved from one hysteria to the next. It makes you wonder if you could ever trust the market sentiment. What’s the next hysteria moving the market? Who knows…
Coffee in China is hot again.
So, what happened?
Shares of Luckin Coffee (Ticker: LK) were up more than 14% on Tuesday. Luckin is a young coffee chain with cheap and mobile-first coffee service in China, which is also known as Starbucks (Ticker: SBUX) of China. In the “Overall Market” section, we told you that investors have moved on from coronavirus. One reason we said that is that the Chinese stocks were back up, and Luckin Coffee was among the top gainers of the day.
Also, it didn’t hurt to see the world-renowned short-seller, Citron Research, came to the rescue of Luckin and announced a much higher price target for the company. When you are known for short-selling stocks and come in favor of a specific company, investors tend to take note.JTNDc2NyaXB0JTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3aWRnZXQuc3RvY2tjYXJkLmlvJTJGanMlMkZzYy13aWRnZXQuanMlMjIlMjB0eXBlJTNEJTIydGV4dCUyRmphdmFzY3JpcHQlMjIlM0UlM0MlMkZzY3JpcHQlM0UlM0NkaXYlMjBjbGFzcyUzRCUyMnNjLXdpZGdldC1jb250YWluZXIlMjBzY19sYXJnZSUyMiUyMGRhdGEtdGlja2VyJTNEJTIyTEslMjIlMjBkYXRhLXRva2VuJTNEJTIyVE5jcHJLN043MVhpbVBqQ0pxYnJEMjVYZ1d2MiUyMiUzRSUzQyUyRmRpdiUzRQ==JTNDc2NyaXB0JTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3aWRnZXQuc3RvY2tjYXJkLmlvJTJGanMlMkZzYy13aWRnZXQuanMlMjIlMjB0eXBlJTNEJTIydGV4dCUyRmphdmFzY3JpcHQlMjIlM0UlM0MlMkZzY3JpcHQlM0UlM0NkaXYlMjBjbGFzcyUzRCUyMnNjLXdpZGdldC1jb250YWluZXIlMjBzY19sYXJnZSUyMiUyMGRhdGEtdGlja2VyJTNEJTIyU0JVWCUyMiUyMGRhdGEtdG9rZW4lM0QlMjJUTmNwcks3TjcxWGltUGpDSnFickQyNVhnV3YyJTIyJTNFJTNDJTJGZGl2JTNF
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Online dating is not hot anymore.
So, what happened?
Shares of Match Group (Ticker: MTCH) were down approximately 6% on Tuesday. The company is known as the king of online dating. However, in the latest quarterly earnings report, the company missed analysts’ expectations and shared a slowdown in the mobile growth of its fastest-growing property, Tinder. Despite the historical astonish performance of the company, the stock is down, at least for now.
So, who is winning from coronavirus?
JTNDaW1nJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZtZWRpYS5naXBoeS5jb20lMkZtZWRpYSUyRmwyWVd3OUxPa1lxSk5jc29NJTJGZ2lwaHkuZ2lmJTIyJTNFSo what happened?
A few days ago, we talked about the coronavirus watchlist. It was about the companies that are getting hammered because people are worried about coronavirus. Food, travel, and energy companies are among that list. People don’t go out to eat or travel when they are worried about getting sick. Moreover, airlines and transportation companies need less fuel because people travel less. That’s why food, travel, and energy stocks were down in the last few days.
But, is there anyone gaining from the coronavirus?
Think about it. You have to work, but you can’t go out. What do you do? You open that laptop, and Slack (Ticker: WORK) your co-worker and ask him, hey, can we jump on a Zoom (Ticker: ZM) video call? Also, if by any chance you have to go out, you end up wearing a face mask. Who does make face masks? You know the kind that when you wear them, you look like a doctor from Grey’s Anatomy. If you said 3M (Ticker: MMM), you are spot on. The price of all three stocks has been going up rapidly in the last few days, as investors are excited about the opportunity arising from coronavirus impact.
The moral of the story is that every dark situation has a bright side. It’s our job as investors to find the bright spot of the dark stories.Disclosure: Authors of this Scoop own shares of Starbucks (Ticker: SBUX).
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
