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The Pandemic Economy: Which Stocks are Weathering the Storm?

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The Pandemic Economy infographic

The Pandemic Economy: The Stocks Weathering the Storm

When markets get wacky, even the best companies can’t avoid the maelstrom.

Investors were already tiptoeing on broken glass, knowing that the longest U.S. stock market bull run in history was getting long in the tooth.

Then, when the market foresaw the potential damage that could be caused by the COVID-19 pandemic, it quickly created a vortex that would suck almost everything into it.

Bizarro Market

In the last week, markets flipped into an alternate universe. Every major stock got crushed, while suddenly those holding onto stockpiles of toilet paper and soup reigned supreme.

In such unique circumstances, we wondered which companies were weathering the storm of volatility. To do this, we used Finviz to pull up a visualization of S&P 500 performance, then investigating the segments of the market that were doing well in spite of the recent plunge.

Stock selectionPerformance (Mar 5-12)Components
S&P 500-18.0% ๐Ÿ“‰The 500 largest U.S. companies by market cap
The Pandemic Economy+12.7% ๐Ÿ“ˆSoup, bleach, pizza, and telecommuting stocks

A few companies not only avoided the chaos โ€” they actually thrived over the last week.

Let’s look at why!

Not Getting Bugged Down

With global travel, events, and social gatherings screeching to a halt, it’s obvious that this is not a winning situation for any typical economy.

However, it’s hard for everyone to simultaneously be a loser, and it’s always inevitable that some stocks will benefit from any crisis โ€” or at least not get hit as hard as their peers.

  • Zoom Video Communications (ZM)
    There’s no doubt a pandemic is tough on brick-and-mortar companies, but for most white collar workers the show must go on. As a pure play stock in the video conferencing category, Zoom is uniquely positioned as companies shift to more remote work.
  • Domino’s Pizza (DPZ)
    With people wanting to avoid crowds because of COVID-19, it’s natural to want to order in. Domino’s, as well as other companies that focus on food delivery, stand to benefit in the short term from the virus.
  • Campbell Soup Company (CPB)
    Campbell is the quintessential counter-cyclical stock, and even more so in a prepping environment. When the global outlook is gloomy, people want to stockpile โ€” and soup is a major pantry staple.
  • Teladoc Health, Inc. (TDOC)
    If sitting in a doctor’s office with dozens of other sick people can be avoided, it seems it would be regarded as a prudent decision. For this reason, remote health services are an obvious focus for investors during the pandemic.
  • The Clorox Company (CLX)
    Wash your hands. Wash your hands. Have you heard that you should wash your hands to avoid the spread of the coronavirus? Clorox benefits from this sudden interest in sanitation and cleanliness.
  • Everbridge, Inc. (EVBG)
    When times are uncertain, global decision-makers want to get as much quality information as possible. Everbridge offers a risk intelligence platform that provides this service.
  • Virtu Financial, Inc. (VIRT)
    Whether markets are going up or down, large amounts of volume and volatility are a good thing for financial services companies that make money from high frequency trading.

Not all of these companies are in the green โ€” some have simply traded sideways โ€” but on average, they’ve seen a 12.7% bump in price over the last week.

Whether that will last in a fast-changing news environment is another story.

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Maps

Mapped: The Growth in House Prices by Country

Global house prices were resilient in 2022, rising 6%. We compare nominal and real price growth by country as interest rates surged.

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The Growth in House Prices by Country

Mapped: The Growth in House Prices by Country

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Global housing prices rose an average of 6% annually, between Q4 2021 and Q4 2022.

In real terms that take inflation into account, prices actually fell 2% for the first decline in 12 years. Despite a surge in interest rates and mortgage costs, housing markets were noticeably stable. Real prices remain 7% above pre-pandemic levels.

In this graphic, we show the change in residential property prices with data from the Bank for International Settlements (BIS).

The Growth in House Prices, Ranked

The following dataset from the BIS covers nominal and real house price growth across 58 countries and regions as of the fourth quarter of 2022:

Price Growth
Rank
Country /
Region
Nominal Year-over-Year
Change (%)
Real Year-over-Year
Change (%)
1๐Ÿ‡น๐Ÿ‡ท Tรผrkiye167.951.0
2๐Ÿ‡ท๐Ÿ‡ธ Serbia23.17.0
3๐Ÿ‡ท๐Ÿ‡บ Russia23.19.7
4๐Ÿ‡ฒ๐Ÿ‡ฐ North Macedonia20.61.0
5๐Ÿ‡ฎ๐Ÿ‡ธ Iceland20.39.9
6๐Ÿ‡ญ๐Ÿ‡ท Croatia17.33.6
7๐Ÿ‡ช๐Ÿ‡ช Estonia16.9-3.0
8๐Ÿ‡ฎ๐Ÿ‡ฑ Israel16.811.0
9๐Ÿ‡ญ๐Ÿ‡บ Hungary16.5-5.1
10๐Ÿ‡ฑ๐Ÿ‡น Lithuania16.0-5.5
11๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia15.44.2
12๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria13.4-3.2
13๐Ÿ‡ฌ๐Ÿ‡ท Greece12.23.7
14๐Ÿ‡ต๐Ÿ‡น Portugal11.31.3
15๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom10.0-0.7
16๐Ÿ‡ธ๐Ÿ‡ฐ Slovak Republic9.7-4.8
17
๐Ÿ‡ฆ๐Ÿ‡ช United Arab Emirates
9.62.9
18๐Ÿ‡ต๐Ÿ‡ฑ Poland9.3-6.9
19๐Ÿ‡ฑ๐Ÿ‡ป Latvia9.1-10.2
20๐Ÿ‡ธ๐Ÿ‡ฌ Singapore8.61.9
21๐Ÿ‡ฎ๐Ÿ‡ช Ireland8.6-0.2
22๐Ÿ‡จ๐Ÿ‡ฑ Chile8.2-3.0
23๐Ÿ‡ฏ๐Ÿ‡ต Japan7.93.9
24๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico7.9-0.1
25๐Ÿ‡ต๐Ÿ‡ญ Philippines7.7-0.2
26๐Ÿ‡บ๐Ÿ‡ธ United States7.10.0
27๐Ÿ‡จ๐Ÿ‡ฟ Czechia6.9-7.6
28๐Ÿ‡ท๐Ÿ‡ด Romania6.7-7.5
29๐Ÿ‡ฒ๐Ÿ‡น Malta6.3-0.7
30๐Ÿ‡จ๐Ÿ‡พ Cyprus6.3-2.9
31๐Ÿ‡จ๐Ÿ‡ด Colombia6.3-5.6
32๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg5.6-0.5
33๐Ÿ‡ช๐Ÿ‡ธ Spain5.5-1.1
34๐Ÿ‡จ๐Ÿ‡ญ Switzerland5.42.4
35๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands5.4-5.3
36๐Ÿ‡ฆ๐Ÿ‡น Austria5.2-4.8
37๐Ÿ‡ซ๐Ÿ‡ท France4.8-1.2
38๐Ÿ‡ง๐Ÿ‡ช Belgium4.7-5.7
39๐Ÿ‡น๐Ÿ‡ญ Thailand4.7-1.1
40๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa3.1-4.0
41๐Ÿ‡ฎ๐Ÿ‡ณ India2.8-3.1
42๐Ÿ‡ฎ๐Ÿ‡น Italy2.8-8.0
43๐Ÿ‡ณ๐Ÿ‡ด Norway2.6-3.8
44๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia2.0-3.4
45๐Ÿ‡ต๐Ÿ‡ช Peru1.5-6.3
46๐Ÿ‡ฒ๐Ÿ‡พ Malaysia1.2-2.6
47๐Ÿ‡ฐ๐Ÿ‡ท South Korea-0.1-5.0
48๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco-0.1-7.7
49๐Ÿ‡ง๐Ÿ‡ท Brazil-0.1-5.8
50๐Ÿ‡ซ๐Ÿ‡ฎ Finland-2.3-10.2
51๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark-2.4-10.6
52๐Ÿ‡ฆ๐Ÿ‡บ Australia-3.2-10.2
53๐Ÿ‡ฉ๐Ÿ‡ช Germany-3.6-12.1
54๐Ÿ‡ธ๐Ÿ‡ช Sweden-3.7-13.7
55๐Ÿ‡จ๐Ÿ‡ณ China-3.7-5.4
56๐Ÿ‡จ๐Ÿ‡ฆ Canada-3.8-9.8
57๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand-10.4-16.5
58๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR-13.5-15.1

Tรผrkiyeโ€™s property prices jumped the highest globally, at nearly 168% amid soaring inflation.

Real estate demand has increased alongside declining interest rates. The government drastically cut interest rates from 19% in late 2021 to 8.5% to support a weakening economy.

Many European countries saw some of the highest price growth in nominal terms. A strong labor market and low interest rates pushed up prices, even as mortgage rates broadly doubled across the continent. For real price growth, most countries were in negative territoryโ€”notably Sweden, Germany, and Denmark.

Nominal U.S. housing prices grew just over 7%, while real price growth halted to 0%. Prices have remained elevated given the stubbornly low supply of inventory. In fact, residential prices remain 45% above pre-pandemic levels.

How Do Interest Rates Impact Property Markets?

Global house prices boomed during the pandemic as central banks cut interest rates to prop up economies.

Now, rates have returned to levels last seen before the Global Financial Crisis. On average, rates have increased four percentage points in many major economies. Roughly three-quarters of the countries in the BIS dataset witnessed negative year-over-year real house price growth as of the fourth quarter of 2022.

Interest rates have a large impact on property prices. Cross-country evidence shows that for every one percentage point increase in real interest rates, the growth rate of housing prices tends to fall by about two percentage points.

When Will Housing Prices Fall?

The rise in U.S. interest rates has been counteracted by homeowners being reluctant to sell so they can keep their low mortgage rates. As a result, it is keeping inventory low and prices high. Homeowners canโ€™t sell and keep their low mortgage rates unless they meet strict conditions on a new property.

Additionally, several other factors impact price dynamics. Construction costs, income growth, labor shortages, and population growth all play a role.

With a strong labor market continuing through 2023, stable incomes may help stave off prices from falling. On the other hand, buyers with floating-rate mortgages face steeper costs and may be unable to afford new rates. This could increase housing supply in the market, potentially leading to lower prices.

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