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What will coronavirus do to the stock market in 2020?

I personally believe that this is only the start of the recession. There’s a much higher chance of stocks going lower from here and the recession lasting six to 18 months. As of right now, if you haven’t seen the U.S. has the most cases of coronavirus and the number of cases is only growing exponentially. This is due to a huge inefficiency of not having enough kits to test early-on. The U.S. did not contain the outbreak or take it seriously. We’re playing catch up. For the U.S. only around half the States are currently quarantining. This is kind of crazy, especially added to the fact that we haven’t banned domestic travel. Someone from X state could bring it over to another state. It’s not effective if some States are quarantining but other States aren’t.

We need to understand how long coronavirus will last and how the consequences of coronavirus will affect the economy. There are three possible situations of what could happen.

The Three Possible Situations

The first situation is that every single country is able to contain the coronavirus. Everything disappears. We go back to normal life in the next month. That’s very unlikely. Even after countries reach peak level of outbreaks, there will still be more people catching coronavirus at a slower rate.

 

Returning to Normal

 

The second possible situation is people accept living with the risk of coronavirus and operate normally. The second order consequences of this situation would be that millions of people are infected rapidly and potentially die. If this were to happen our healthcare system will not be able to care for the amount of infected people. The amount of people needing care will overwhelm the limited medical resources and healthcare professionals available. That is a recipe for disaster.

 

Accepting Coronavirus

 

Lastly, that brings us to the third situation. This is that a prolonged quarantine will continue to be in effect in many States. As of today in the Bay area, the quarantine is supposed to last until May 1st at the earliest. Although this will slow down the rate of infection, it cannot fully solve the situation. I believe this is going to last until we’re able to figure out a vaccine. Experts say this is around 12 to 18 months away. There will be prolonged periods of quarantine that will continue to put a lot of people out of jobs. For example hospitality companies, travel companies and small businesses will suffer. People are spending less because they’re inside.

 

Long Quarantine

 

The Start of a Recession

The stock market has not yet priced in all of these factors. I think this is just the beginning of the recession, and we should be seeing lower stock prices. Now’s a great time to start looking to invest into the stock markets if you haven’t already.

 

Stock Invest NOW

 

 

I’m personally looking at a few different stocks and industries – like hotels and flights. These industries are important to look at because in the eventual future people people will start traveling again. A lot of these different industries have heavily discounted stocks. I have another video on my top 5 stocks picks for April 2020 if you are interested. The consequences brought on by coronavirus will leak into the economy. Consumer spending is going to go down.

Overall GDP will decrease because people spend less, businesses make less, which means businesses will hire less people and be less committed to growth. It is a downward spiral that will require either the government to step in and inject even more money than the $2 trillion that they already have. If they inject more, we’re going to have significant later order consequences down the line. We’re assuming that people can go back to work within a month, which does not sound plausible whatsoever. These factors have not priced into the stock markets yet. We will have a bigger bloodbath in the future.

That’s my current thoughts on the economy and how it’s going to affect the stock market in 2020. Let me know if you enjoyed this post. If you have any questions or if you disagree with me, please comment below. I would love to hear your thoughts and opinions on this. If you like what you’re reading subscribe to my youtube channel: https://www.youtube.com/channel/UC1kwgWOHVon3gEesdKR65Jg?view_as=subscriber

Thanks!

9 Replies to “Coronavirus Stock Market Recession 2020?!”

  1. This is just the beginning we have not seen anything yet. There will no end to this till November 15 to December 15,That when we start seeing a difference..So Unfortunately many people will pass away until there is some medical advice that will stop this.

  2. So, this is quite apart from your Father’s technical analysis based trading? This is more of a long term investment strategy?

    1. Hey Stephen, this video is to help people with their long-term investments during Coronavirus. My dad’s techniques are more specific and focused that we only teach to our students! Make sure you check the charts and read carefully based on his techniques since you are learning about all the indicators in the markets. 😀

  3. Hi Tim,iam new in SN,I right now have DRIP’s and 401K,,I hope to learn and practice to take control of my finances Iam agree with your comment and could be worst too.
    Thanks.

  4. I concur on that! Time to open up so people can go back to work now!
    I had been working entire time! Sometimes work remotely half day and onsite half day. Just wearing mask, keep social distancing, clean your hand often and avoid touching your face,…
    Hi Tim, send me a link so I can start your training classes!
    Thanks,
    Anthony Pham

  5. Hi Tim, I agree with you that we are in recession now. But I believe that we will come out of it by Q4. I saw your other video about stocks to invest today and want to comment (that video is not available anymore from the link). I agree that oil, business hotels and car rental companies are great for long term investment now. For airlines, I would spread my investment among the top 5 business airlines, as I am worried that some may chose to take this to bankruptcy to lower debt levels and/or get rid of some bad contracts. I would stay away from Cruise lines as people would be worried to be stuck in the ocean if here is another outbreak. I would add Entertainment stocks to your list of good long term investment (DIS, VIAcom). Due to election, I would stay away until the end of the year from GOOGLE, FB, Amazon (antitrust concerns) and Healthcare/ Pharmaceuticals. It maybe a good idea to do a video on what would change after COVID-19 and which stock will benefit over the long term. For example, I am looking for Robotization of our “essential economy”. I see more Robots in warehouses and grocery stores, hospitals. Online gaming is another secular trend that has been accelerated with stay at home order, Although, I would wait for a pull back here, as these stocks still have hefty valuations or stick with co that sell gaming peripherals like $LOGI and $HEAR. Another unfortunate trend of the stay away order is increase in domestic violence that may result in more divorces and additional revenues to companies like Match.com. There are trends. It could be a good video to talk about them all. Good Luck

    1. Hi Gene,

      Thanks for sharing your story!! I like your ideas and insights and agree with you. You are bringing up so many good points and I will definitely consider doing something like this in one of my next videos.

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