The Covid-19 pandemic, which started in late 2019 in China, has now spread across the world like wildfire. With millions infected and governments across the planet looking for ways to slow down the spread, all sorts of industries have been impacted in a big way. The financial impact of the pandemic to date has been immense.
The trading markets have experienced some of the most turbulent times in modern history and stock markets reached all-time lows on several occasions through 2020. As we seem to be approaching a better time, we look at just how Covid has impacted the trading markets in 2020.
Virus’ spread crashes the markets
Covid started spreading outside of China in late February and February 24th was the day that the world markets experienced what it meant for the first time. On that day the Dow Jones Industrial Average dropped by over 3% and benchmark indices across Europe followed.
This fall was seen across all of the world’s markets and was only about to become worse. Over the following months, stock markets across the world experienced some of the worst crashes ever and measures such as the 15 minute trading circuit-breaker had to be used for the first time since 2008. Aside from this article, you can read more about trading and how it was impacted by Covid across the web.
The oil market suffered greatly as well, with oil prices hitting an all-time low. The international travel ban that was imposed by many countries meant that oil was not a valuable commodity for a while, and in some countries oil was worth less than $0 per barrel, as the storage prices became too high.
Numerous companies across the world filed for bankruptcy during 2020, such as Diamond Offshore, Whiting Petroleum and J. Crew, all of which were not able to bear the financial stress that the pandemic induced measures were causing. Some companies felt the stress even more than the individuals affected by the pandemic.
Stay at home rules increase value of digital companies
As was predicted early during the pandemic when various stay at home directives started being implemented, businesses that focus on digital aspects have been gaining in value. This includes all sorts of gaming and streaming services, social media and the like.
The impact of the pandemic has been most positively felt by services such as Netflix, whose value increased by 70% over the last year, much thanks to the fact so many people are stuck at home. Amazon, Microsoft and PayPal experienced similar huge gains in value and revenue in 2020.
On the other side of the spectrum, companies in the automotive industry have almost all lost some of their value with the likes of Mercedes, Ford and BMW all experiencing significant drops in share value. The invention and distribution of the Covid vaccines, which is planned for early 2021, may see some of these values bounce back towards the more natural numbers.