It is no doubt that COVID-19 has shaken the world and rocked the financial sector, but just exactly how has this on-going pandemic made its mark? Continue reading to discover the main areas affected.
The coronavirus has altered almost all areas in either negative or positive ways. From employment, to commodities and stocks the time has certainly been remarkable. As mentioned in other articles, the stock market was soaring while the economy was down. This means there is a sort of disconnect occurring in some areas.
Areas within the financial sector that have been hit more negatively due to the virus are mainly oil & gas, and selective stocks present in the hospitality and tourism world.
Oil & gas plummeted in the height of COVID-19, but you might be asking yourself why? When the world hunkered down and entered the lockdown phase of this tragic time, the demand for this commodity took a nose-dove. Nobody needed oil or gas. Travel was at a stand-still and basic daily communities were simply not happening. With that said, as demand went down supply kept going up, there is a “backstock” of oil as these countries kept producing at their normal rate. In fact, the relation of supply and demand was so off that vessels were used as storage and the price of oil reached a point where it was nearly a zero sum cost because these companies were desperate to move the product.
In addition, the other major impacted area in investments are stocks in the hospitality and tourism industry. That is not to say that other industries are not affected as well, as recent consumer spending reports have shown a dip; the hospitality industry, similar to oil and gas commodities has reached, in some cases, a mandatory freeze. Consumers were forced to cancel bookings and re-think that planned vacation. According to BBC News, the number of global flights from July of 2019 compared to Juy of 2020 have almost been slashed in half.
Coronavirus has not only affected these two vital aspects in the investment world, but has clearly rattled other markets such as employment, pharmaceuticals, consumer spending and confidence, and more. COVID-19 has certainly left a footprint in today’s world. Will it alter markets to an extreme looking forward into the future?
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