The global economy has undergone a paradigm shift in recent months. With the hustle and bustle of Wall Street a distant memory for now, analysts are identifying key industries that are thriving in the ‘new normal’. It’s difficult to imagine a return to the past, suffice it to say that a new cultural zeitgeist has emerged from the chaos and is starting to take shape right before our eyes.
Humankind has shed eons-old practices like handshaking, embracing, and close contact, in favor of social distancing, isolation, and remote activities. Despite the health risks in and out of flu season, we have now learned that safety comes first.
The Dow Jones, the NASDAQ, the S&P 500, CAC 40, DAX 30, FTSE 100 index, and Nikkei 225 are largely persona non grata. It’s difficult to assess when we will trust in these institutions again, particularly with respect to retirement planning and ROI. What has emerged in the wake of recent events is an understanding that new ways of doing things are not only required, they are necessary.
The world economy has undergone a metamorphosis; the butterfly we were expecting suddenly became the ugly caterpillar, but all the chapters of this story have yet to be written. There are many industries that have shown surprisingly resilience, innovation, and dynamism in recent months. They cut across the spectrum, including healthcare, entertainment, education, food and beverage, and hedge investments too.
It may appear disingenuous to suggest that the healthcare industry is booming, but components of it most certainly are. R&D (Research and Development), testing, pharmaceuticals, medical insurance, biotechnology, biopharmaceuticals, and manufacturers of PPE (personal protective equipment) such as facemasks, gowns, gloves, medical ventilators, et al truly are booming as we speak. We are also seeing huge increases in TeleMedicine as people take to virtual doctor appointments for safety, convenience, and comfort during difficult times.
It is likely that these components of the healthcare industry will experience meteoric increases in productivity, performance, and investment in 2020 and beyond. If we’ve learned anything from the current predicament it is that we can never have enough life-saving, protective, and preventative hardware in place for rounds 2, 3, and 4… The healthcare industry is likely to experience a flood of investment from the public and private sector. Expect a much larger budget allocation towards the healthcare industry moving forward.
Television and media
CNN, BBC, Fox News, Al Jazeera, CBS News, the New York Times, the Washington Post, the Daily Mail, et al are all experiencing multigenerational viewership highs during this time. Rarely in modern-day history has the media been as watched for as much time as it currently is. According to Statista, February 2020 figures for cable news networks in the United States indicate a rampant rise in viewership, particularly during prime time. The following figures have been released:
- Fox News – 3528 (000) primetime and 587 (000) aged 25-54
- MSNBC – 1783 (000) primetime and 317 (000) aged 25-54
- CNN – 1046 (000) primetime and 296 (000) aged 25-54
The figures for all major ‘cable news networks’ remain strong, despite Internet-accessible TV and media options.
The legal online gambling industry has undergone a dramatic shift in recent months. The shuttering of Las Vegas and Atlantic City casinos et al for safety and security reasons, has given rise to a dramatic increase in online gaming activity. This is particularly notable in online casino, online poker, and online betting activity.
While sports betting has been hamstrung by the closure of the NBA, NFL, NHL, MLS, F1, NASCAR, horseracing, tennis, PGA golf, and a veritable glut of other US and international sports, a new breed of sports betting has emerged in the form of virtual sports betting, eSports, and traditional sports betting with no spectators in attendance in closed-door stadiums. While this is certainly not expected to be the new normal, it is nonetheless a thriving industry with tremendous growth potential.
Other popular social games played for money such as online poker continue to see strong growth in player numbers. Online poker tournaments present players with the opportunity to compete against skilled and unskilled players across multiple regulated jurisdictions, from PC, Mac, and mobile devices. Games like Texas Hold’em, Omaha Hi-Lo, Stud, Razz and lesser-known variants of the game are gaining traction with large and growing numbers of players around the world.
Indeed, an article surfaced on The Inquirer.com detailing the boom in online gaming revenues in Pennsylvania where the 12 casinos have shuttered operations and revenues collapsed 51% in March to $154 million, from $316 million in March 2019. Online casinos – according to the Pennsylvania Gaming Control Board (PGCB) brought in $57 million + over the past 3 months from online casino wagering, substantially higher than the $34 million brought in from July through December 2019.
Current realities preclude mass gatherings of people in cinemas, theatres, and playgrounds. The move towards home-based entertainment has generated significantly higher levels of viewership on Netflix, Hulu, Apple TV, and other grey market streaming services such as Project Free TV, Mehliz, and so forth. As the ranking provider of budget-friendly movie streaming services, Netflix has seen meteoric growth since 2011 when it had less than 22 million paying subscribers. By 2019, Netflix had racked up an incredible 150 million paying subscribers, and it is estimated that 37% + of the global Internet user base now has Netflix access.
Between 2000 and 2019, Netflix’ net income shot up from $-58,000 in 2000 to $1,866.92 million by the end of 2019. These figures are testament to the spectacular growth and popularity of this movie streaming industry. Business Insider reported that the overall number of Netflix subscribers is now 167 million+ (January 24, 2020), with surging levels of subscribers in recent weeks. Netflix invests heavily in financing its own movies, series, and promotional activity – a true juggernaut of an industry. The cost of a Netflix share on the NASDAQ has appreciated from $278.05 in October 2019 to the current price of around $423 heading into May 2020.
Gold is everybody’s favorite safe-haven asset when the economy sours. Geopolitical conditions have created the perfect storm for a resurgence in the gold price. While global markets have not quite heeded the call to invest in gold as one might expect, the performance of the precious metal has been notably bullish, albeit in a subdued fashion. Over the past 1 year, it is evident that the gold price has skyrocketed, from $1286 per ounce in May 2019 to its current price of $1682.79 per ounce heading into May 2020.
Investments in gold continue to dominate market activity as traders and investors seek out safe-haven assets to bolster their retirement portfolios. With interest rates near zero, there is little to be gained from maintaining funds in bank accounts, or fixed-interest-bearing certificates of deposit. The gold industry may not be prospering by dint of the low global demand and stay-at-home orders, but the store of value function of gold remains intact and gold is a high-demand asset. Investments like SPDR Gold Trust are seeing large inflows of funds, as are individual gold mining companies like Barrick Gold, Franco-Nevada, Goldcorp, Newmont Mining, and Newcrest Mining.