Stocks that might benefit from a stay-at-home policy

March 23, 202027 Comments

It’s interesting to see how China, the instigator of this virus (apparently Taiwan as well) has managed to control the COVID-19 virus. Canada and the USA will probably at some point be forced into instigating a wide stay at home policy. China instigated a 30-day shut-down of everything – including an enforced stay-home policy. This was done early in their crisis, leading the country to quickly enable strong controls and stabilization of their economy.

Some stocks may benefit from a more serious commitment in North America to isolation policies:

Home entertainment

Netflix hasn’t lost a beat in this selloff. You don’t cancel your entertainment subscription when all you have left to do is watch movies at home.

Pizza – a cheap way to feed the family, and its delivered!

The stock is retesting a breakout point, and has done much better than the markets.

Speaking of home delivery…

The king of them all, Amazon, is doing so much online business that they’re adding 100,000 new jobs. The stock has been as steady as the rock of gibraltar.

Business by internet

Lots of companies in this space. I’m using TeamViewer right now to tap into my desktop, having returned from a march break trip to florida and doing the 2 week quarantine. A public stock that helps companies do business over the internet (ideal for the current situation) is Docusign. Check the steady-eddy chart for this stock.

 

Comments appreciated

Do you have any steady looking stocks to share with your fellow readers? Post your comments below and let’s make this a community thing. I appreciate all of those who leave constructive opinions and comments – we’re all in this thing together!

27 Comments

  • Hi Keith,

    The speed of the markets fall was dizzying. I suspect many experienced traders were caught off-guard and didn’t have time to sell as much as they wanted. For one, anyone who sells part of his account based on a monthly candle, well, is already down 30%. Is this an opportunity of a lifetime? It seems “different this time”.

    3 questions which I’m sure to be puzzling economists right now…

    The U.S seems to want to give 10% of their GDP of “free money” (or “liquidity”) and the Federal reserve is willing to turn-on their printing machines for as long as it takes.

    Question 1: Let’s say Canada was to do the same, would that be enough to do all of the following:

    1- Afford paying E.I to 75% of working Canadians
    2- Afford paying a salary to those not covered by E.I
    3- Allow 2 million Canadians to defer their mortgages for 6 months
    4- Help the balance sheets of Canadian banks
    5- Help the balance sheets of credit unions and smaller lenders
    6- Help REIT businesses so that rent arrears don’t force them into bankrupcy
    7- Bailout AirCanada and Westjet
    8- Bailout the energy sector
    9- Bailout restaurant businesses (non public companies)
    10- Bailout hotels
    11- Bailout mortgage companies (syndicated and not syndicated)

    Question 2: If all developing countries are giving free money at the same time and at the same pace, could the End Result be…. nothing bad? Afterall, the value of currencies and debt are relative.

    Question 3: Is there a real chance that taxes go up 10% for the following years?

    Thank you and good luck to this country.

    Reply
    • I can’t answer those questions but — good questions they be!

      Reply
      • I think those are great questions and certainly ones I am asking!!

        Reply
    • The govt “paying wages and rent and business losses etc with unearned money , aka, fresh off the press is highly inflationary. The ?? is can you , your assets and investments keep up and can the country stay competitive. The answer i think is no, we are already behind competitively and losing ground fast. Keith as a competitive bike racer will tell you , once you fall behind the road is all up hill.

      Reply
      • Yup, you lose the pack in a bike race, you are alone in no-mans land. Same with the economy.

        Reply
  • It might be interesting to watch the cannabis stocks. I also saw a piece somewhere today hypothesizing about a growth in cannabis demand for so many people forced to stay at home. Cannabis stocks do seem to be turning up in recent sessions in the face of market falls. But it may hinge on whether private stores have to close – and if they do, whether they will wake up to the idea of delivery.

    Reply
    • Well Peter, it would appear that here in Ontario, pot and booze outlets are considered “essential services” and wont close. Priorities, baby.
      Love to talk but…Gotta go – slamming down a bottle of cheap whisky to wash the nasty taste of pot outta my mouth (ha ha).
      Good grief.

      Reply
  • With all this QE giong on and massive amounts of money being spent…….nobody is talking about soverign debt…..which which as been exploding throughout the world over the last 10 years.
    There is a l imit to debt……

    Reply
    • One reader (Matt) posted a contemplation on this: if every country borrows, then its neutral….
      Again, this is an economists field. The former economist for Stats Can was interviewed by the PPC leader before this situation hit the fan and he noted that the Liberals had already spent too much so they would be limited to some extent in fighting a real disaster. Id have to say the same for the USA.

      Reply
  • DPZ came up on one of my scans this past weekend, admittedly it caught me off guard, Why would people order food handled others (yes I know it is cooked). Still comes in a box handled by people, but hey pizza sure is good!! It is on my watch list.

    Zoom is another runaway stock

    Carey

    Reply
    • Great question Carey–that sector may not remain strong as the virus scare grows. But the other sectors noted likely will.

      Reply
  • Fiscal debasement is alive and growing. Gold and gold equities should soar especially with a depreciating $US. Expect a polarization of the right and left. Welcome to the 1930’s!

    Reply
  • Keith, now that the S&P did not hold at 2350 is there a new level such as 2200 that you “limp” in for a trade or do you wait until it goes back up to 2350 and holds?

    Reply
    • My mindset now is to trade out on this rally, and not necessarily buy into it (yes, I changed my mind!). I wonder if there will be a final selloff after this oversold rally. This, based on my blog/observations re 2001 and 2009. At this point, Support bands like 2350 seem to be meaningless in this panic environment. So I’ll pay more attention to sentiment data, which has indicated a rebound rally is pending. But when it’s moved from oversold (now) to neutral, I’m inclined to sell into that and wait to see if anything changes.

      Reply
  • Hi keith:
    Your picks are on the money. I would add the tickers US – ZM, TEAM, OKTA, TTWO and TDOC. But as a s/term player should I be playing these now or the next bounce will find the tried and true going up i.e. amzn, msft and aapl. Thanks so much and always wish u the best.

    Khokon

    Reply
  • Hello Keith,

    China holds a Trillion dollars of US Treasuries. Do you think they would be motivated to start dumping them now that the US Govt. will start devaluing their currency with massive money printing.

    Could the Chinese force the treasury rates higher if they sold theirs at the same time as the US Govt? After all, Treasuries are at all time high value and the dollar is almost there too

    Reply
    • Dan, I am but a simple chartist. That’s a question more suited to an economist or a pro bond or currency trader.

      Reply
  • Hi Keith,

    Having young adult children at home again for the crisis, I have watched them purchase 5 video games in the last week. As such I had a discussion with them about video gaming stocks. Presently they are recommending Activision Blizzard (ATVI), because they are the makers of Call of Duty. It is now hitting its long term (10 yr) trend line, and 200dMA, RSI and Accum/Dist are favourable still (although RSI not oversold and short term stocastics are negative), and MACD is just starting to hook up….I think it’s worth keeping an eye on

    Reply
  • Last few days as the S&P has made new lows the vix has not made new highs. Could indicate the downward action is losing power

    Reply
  • If you would please educate me on futures, index and stock.
    Each morning I wake to hear the futures are showing some trend, well before the markets open.
    1) Is there a website one can go and see this real time data?
    2) Who is buying or selling what to report the futures trend for the day?
    3) Is it individual stock related? Is it a real transaction that affects the price of the share? Can individual investors buy that companies share in advance of the market opening?

    Simply I just don’t understand this “futures” market.
    Thanks

    Reply
    • To trade overnight futures you’d have to talk to a futures brokerage.
      To track them, you can use an app–one good one (despite the ads) is Realtime Stocks tracker
      It costs a bit but worth it–they have live data including futures

      Reply
  • How about gun stocks? I hear anecdotally that in my community sales are best ever.

    Reply
  • Watched a Larry McDonald video last week suggesting now would be a time to buy. Average True Range and volumes spike a the peak sell-off. Both are happening now on the TSX and SPX. And today’s market is up.
    Should I wait three days?

    Reply

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