Finance

Impact of Coronavirus on the Price of Stocks

In just weeks since the advent of the novel virus corona, also known as the COVID-19, its impact has been massive. As of now, only 29% of the active cases (people who are infected and still undergoing treatment) of the coronavirus are in China.

The remaining chunk of 71% is spread across other parts of the world. This is causing a lockdown in many countries due to the spiraling numbers causing global panic and stalling economic and social activities. Global finances have been greatly affected too as a result of this, but we do not know just how much yet. 

In the stock market, the impact of the virus has been significant in the equity and stock market. We thought this was it until the crude oil cold war started between Russia and Saudi Arabia. The crude oil war between these two countries is making things worse and has injected volatility into other assets. 

In percentage terms, the impact of the coronavirus on stock prices is quite visible, especially among blue stock chips such as Apple, Amazon, and Alibaba. Apple, for instance, had a close price that was trading at a 12% discount as of March 13; likewise, Alibaba was trading at only 9% discount and Amazon at a 15% discount. 

What this means is that the markets are bleeding. We are currently in the bear-market territory, and for smart investors, there is no better time to scoop up some good bargains because of the recent sell-offs. 

As much as this seems unsettling right now, we do need to remember that over time, these stocks will recover and investors will recover, too. 

The amount you can make trading stocks

depends on the market you are buying and how smart you are in your trading. 

Some of the potentially juicy deals in terms of stock trades right now as a result of the COVID-19 panic will be in freights and logistics. Online shopping is playing a big role right now in establishing a link between buyers and sellers and who else to get the job done but logistics companies. 

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Freight and logistics companies like FedEx and Amazon will have their markets shooting up even if it would not be for so long, it will certainly take a while before their stocks return to its normal rate. 

The amount you can make trading stocks right now from these potentially attractive buying opportunities could be quite juicy. Although FedEx is a dividend stock and has not raised its payouts in more than a year, it does pay a 2.6% yield per year and also trading near its 52-week low. 

As the world battles the COVID-19 virus, there would be more delivery demands because consumers will continue to avoid crowded stores, and importations will continue. So, for similar reasons, investing in Amazon will greatly increase the amount you can make trading stocks.

Medications need to be delivered, and Amazon is earning goodwill from the public as a result of its partnership with the Gates Foundation to help deliver test kits in the battle against the coronavirus. 

The coronavirus has also affected gold sales.  Even while other commodities are going down, gold has gone up significantly. The demand for gold is still intact as the initial target for gold in India was $1,700 but is looking like it can go up to $1,800 if the virus is not contained anytime soon

The impact of the coronavirus on the prices of the stock is in two ways. While some companies have their stocks plummeting, others have their stocks growing.

Only the calmer heads will wisely invest in potentially rewarding stock trades. There is a reason Amazon is one of the top stocks on the NASDAQ. It is, therefore, not a stock that should be counted out for long.   

In a market where few make the big bucks, and most people lose out, it is expected that the effects of the impact of coronavirus on the stock market will take a disciplined mind and a genius to make the most from this market.

James Woods

Tech Geek and avid developer.

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James Woods

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