As US and global economies begin to reopen, US equity markets will likely enter a new phase. Some companies that have been hit hard by social distancing could be poised to rebound. Other companies that have benefited from trends during the economic lock-down may now be in an even stronger position.
5 means to play the recovery:
- Restocking: We expect industrial and material companies to take advantage of a snap-back.
- Playground: Leisure activities are expected to return relatively quickly to pre-virus levels.
- Digital everything: The existing trend of “All Digital” should get reinforced across many activities but particularly in areas of shopping and automation.
- Hospital Services: As day-to-day activities in hospitals are expected to resume by September, medical device companies could face new demand as a full range of operations were put on hold
- Catch-up effect: In a post-pandemic world, consumers want to re-enjoy past experiences. Electronic payments systems are expected to further accelerate their sales and profits
Key beneficiaries of these trends are Adobe, Alphabet, Amazon, Cisco, Linde, Lowe, McDonald’s, Medtronic, Straumann, Salesforce, Visa, Mastercard, Walmart.