Market prospects during a pandemic recession

During a pandemic, it can lead to a potential recession period. Most area of the market will be affected as it is interconnected in one way or another through a supply chain or just impacting the consumer behaviour.

Industry that will be negatively impacted are:

• Travel & transportation industry: Airline, cruise-line and uber
• Tourist industry: Hotel, tourist attraction and theme parks.
• Catering industry: restaurant (especially buffet) and cafe
• Retail industry: Non essential store
• Events: Concert, social gathering, clubs, bars
• Theatres and cinemas:
• Sports industry: Sporting events will be suspended
• Gym: gyms are suspended
• Manufacturing industry: demand for certain products such as auto industry will be affected
• Commercial real estate:
• Some banks: with falling interest rate will impact some banks
• Beauty industry: as less people are leaving home, less effort is likely to put on their appearance.

Industries that are expected to grow are:

• Healthcare industry: Telemedicine service that helps doctor diagnose patient online.
• Research & development: vaccine and biotech research
• Pharmaceutical industry: Cold and flu medicine
• Supplement industry: immune boosting supplement like Vitamin C
• Disinfectant product company: i.e. The Clorox Company
• Ecommerce: especially if the delivery system provide disinfectant prior delivery
• Work-from-home industry: Teleconference platform such as Zoom will be essential to conduct meeting, interviews and perform other work related task. Cloud software that enable worker to have access to work programs and data is also likely to be use adapted to more business as well. Laptops, computer and desk will sale.
• Tech Support/ IT Consultancy: Tech Cloud based support will be more on demand as remote workers rises.
• High internet speed: with work, meeting and conference being done at home, high internet speed is essential for business to run efficiently.
• Productivity tools: being at home can be distraction so perhaps apps and tools may be utilise to focus to work at home.
• Governmental sector: government would need more support to handle a period that is chaotic
• Social network: Online social network are more likely to be used.
• Digital marketing industry: digital marketing will rise as more people will be online
• Online entertainment: This includes streaming video service such as Netflix and Disney. Online gaming industry will also be on the rise.
• Cheap budget products: As we may recover from the pandemic,  i.e. dollar stores
• Long expiry date consumer staple food: cans, cereal, nuts, dry fruits, pasta etc…
• Home workout equipment: cycling machine, weights or elastic band
• Short term loans: as unemployment will rise, loans are needed to cover living expense until they are able to find a job again.
• Business consultancy:
• Media industry: More people are eager to be up to date with the news
• Entertainment industry: People tend to tend to movies or youtube to escape the harsh reality.
• Pawn store or auction store: This is a tricky one. Consumer spending will reduce and people will sell their goods at a discounted price. This will be a good time to buy at bargain price. Although you may not find as much customers during the recession period, as economic picks up and consumer purchase power increase again, goods can be sold at a higher marked up price. As long as auction business have enough cash to hold through the recession period, the benefit will be ripped afterwards.
• Recruitment industry: Job search companies, temp work agencies and resume writer tends to do well
• Well being, self care and mental health industry: People are stress look for emotional and psychological guidance
• Anti-stress products: meditation apps, religious content and chocolates comes to mind.
• Non-profit industry: there will be more demand of people needing support
• Home cooking industry: to reduce exposure from the outside, home cooking will be on the rise
• Pay as you go cell phone plan:

There are industries that will still be on demand despite being impacted by the recession (even more so by a pandemic). These industries are called ‘recession proof’. Low risk investor tends to emphasis stocks from recession proof industries in their portfolio. These recession proof stocks are usually considered ‘defensive stock’ because of their low risk nature, less volatile nature, provide regular dividend and have beta lower than 1.

Please note that recession proof stocks does not mean the price will not be affected by a recession and pandemic. However, it is likely to survive a market crash and be less affected other industries.

Recession proof industries are:

• Utility industry: Electricity will always be needed in our daily lives
• Healthcare: healthcare will always be needed
• Pharmaceutical: drugs is a necessity
• Consumer staple: People will need daily goods such as tooth taste, soap, shampoo, toilet paper and cleaning products.
• Discounted good value supermarket: during recession, people will be looking for cheap affordable essential products.
• Real Estate Investment Trust: Resident real estate – as people will always need a place to stay regardless of the market condition
• Credit checking industry:

The performance of the recession proof industry may change depending on the factors such as pandemic, population or change of political landscape.