You can find a lot of good news without looking too hard. The stock market is quite. COVID-19 cases in the US are declining. Robert Redfield, director of the Centers for Disease Control and Prevention, predicted that death rates could drop significantly in the next few weeks. The Food and Drug Administration recently approved emergency use authorization for a saliva COVID-19 test that could be a game-changer because of its convenience and low cost.
If you think there is going to be a “lake”, you are right.
All of these developments are absolutely good news for a pandemic-weary American audience. But more bad news could be just around the corner – possibly including another stock market.
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Children and COVID-19
The CDC recently reported that the number of COVID-19 cases in children in the US “has steadily increased from March to July 2020.” This trend is ongoing, but has so far not been considered a major problem, as there were far fewer cases of COVID-19 in children than in adults.
As of August 3, 2020, only 7.3% of all COVID-19 cases in the U.S. were among children 17 years of age and younger. That’s not as bad as it could be, especially considering that children make up 22% of the total American population. The data also suggest that children tend to experience less severe cases of COVID-19 than adults do.
The CDC thinks that COVID-19 rates among children have been relatively low to a large extent thanks to school closures in the spring and early summer this year. However, students are now returning to schools across the country. Even with schools taking preventative measures and offering hybrid on-site / online classes, it is possible that the trend of COVID-19 cases in children will accelerate dramatically in the coming months.
CDC evidence suggests that children spread the virus to others. This means that teachers, parents, and others with whom infected children come in contact can become ill and infect even more people.
Why a downturn in the market could be underway
Investors have been concentrating on positive developments in recent months. Media reports have focused on the progress of COVID-19 vaccine candidates. Companies have focused on restructuring. Life has not exactly returned to normal, but there are hopeful signs.
But returning students to schools could attract a resurgence in COVID-19 cases. In addition, flu season is underway. The US experienced a mild flu season in 2019. But it is possible that these most common flu strains will be much heavier this year, presenting a double whammy for the nation’s health system.
Combined with the combination of a bad flu season and a new coronavirus pandemic, state and local officials could feel they have no choice but to put up with the lockdowns and commissions imposed earlier this year. setting up. In this scenario, another decline of the market would almost certainly be.
Even with these real threats, the CDC still thinks it is important for children to go back to school. The agency declared in July that “the damage to assigned schools on children’s social, emotional, and behavioral health, economic well-being, and academic performance, both in the short and long term, is known and significant.”
Your best moves
What should investors do with the land apparently between a rock and a hard place? For one thing, do not panic too soon. It is possible that the situation will not be too bad, especially if schools respond quickly if and when outbreaks of COVID-19 occur.
But you can also be proactive. If the prospects of another major market downturn really worry you, consider buying shares of the iShares 20+ years Treasury Bond ETF (NASDAQ: TLT). This exchange traded fund (ETF) tends to move higher as stocks fall.
An even better move could be to buy stocks that are in a great position to perform well, despite what is happening with the COVID-19 pandemic. I especially like it Dollar General (NYSE: DG) en Vertex Pharma (NASDAQ: VRTX).
Dollar General is a discount trader that enjoyed a boom in business during the lockdowns earlier this year. The business is also a good recession game, as consumers are more likely to look for low prices in difficult economic times. However, Dollar General’s expansion strategy should also help it do well in good times.
Vertex claims a monopoly in the treatment of the underlying cause of cystic fibrosis (CF). It received great news last week with European approval of its latest CF drug, Kaftrio. The biotech stock appears to have a compelling growth path in the coming years that is immune to the influence of the coronavirus.
Yes, bad news could be on the way. However, as investors have seen both this year and in the 2008 financial crisis, you may not have to wait very long for good times to return.
