{"id":8600,"date":"2020-04-20T18:10:26","date_gmt":"2020-04-20T18:10:26","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=8600"},"modified":"2022-02-26T13:06:43","modified_gmt":"2022-02-26T13:06:43","slug":"a-post-crisis-vision-for-the-economy","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/a-post-crisis-vision-for-the-economy\/","title":{"rendered":"A Post-Crisis Vision for the Economy"},"content":{"rendered":"\n<p>The Covid-19 global pandemic is wreaking havoc on many (but not all) parts of the U.S. economy. It remains to be seen how quickly the economy can ramp back up once the virus is contained and restrictions are lifted. For investors, I think it\u2019s important <strong><em>not to wait for positive news<\/em><\/strong> <strong><em>as a signal that we\u2019re in the clear<\/em><\/strong>. As I\u2019ve written before, stocks are likely to rally into the next bull market <em>before <\/em>economic data actually improves. It\u2019s important to remember that during the last economic crisis the market bottomed in March 2009 but unemployment did not stop rising until October 2009.<sup>1<\/sup><\/p>\n\n\n\n<p>For all of the negative outcomes this virus and recession\nare creating and revealing, I think it\u2019s also important to consider how the\nU.S. and global economy are likely to evolve, grow, and strengthen as a result\nof everything we learn from this experience. As a starting point, consider if\nany of the below apply to you:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>You are one of the millions of Americans working\nfrom home;<\/li><li>You have children or grandchildren getting\nlessons through \u2018online schooling;\u2019<\/li><li>You communicate for work and\/or with friends and\nfamily using an online platform like Facebook, Zoom, Skype, Instagram, FaceTime,\netc.;<\/li><li>Entertainment at home sometimes (or usually)\ninvolves a streaming service like Netflix, Disney+, Hulu, YouTube, Amazon\nPrime, etc.;<\/li><li>Groceries and other goods are being delivered to\nyour doorstep by your local retailers or Amazon.<\/li><\/ul>\n\n\n\n<p>Answering \u2018yes\u2019 to any of these questions means you\u2019re\nrelying on the <em>digital economy<\/em> and the\nUnited States\u2019 digital infrastructure to live and work. In order for these tools\nand applications to work and function smoothly, the government and corporations\nacross all sectors will need to make significant investments in cloud,\nenterprise software, 5G, and all of the hardware needed to make sure a business\ncan hum in the digital economy. For better or worse, the American consumer also\nneeds these investments to happen given that we increasingly shop, connect, and\nwork online.<\/p>\n\n\n\n<p>___________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2020_4_20&amp;content=stock_market_outlook_report\">Time to Focus on Long-term Progress and Innovation NOT Media Hysteria<\/a><\/strong><\/p>\n\n\n\n<p>In times like this when market volatility is a constant and\nrecession fears saturate the media, it is important not to lose sight of the\nlong-term view. Don\u2019t let media hysteria cause you to make knee-jerk responses\nnot based on data and fundamentals but on emotion. Instead, I recommend\nfocusing on the fundamentals, hard data, progress and innovation being made. To\nhelp you do this, I am offering all readers our just-released Stock Market\nOutlook report. This report contains some of our key forecasts to consider such\nas:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li> <em>Top four &#8220;stay-at-home&#8221; sectors at play<\/em><\/li><li><em>What stocks would come to life with a vaccine?<\/em><\/li><li><em>Top stocks in top industries<\/em><\/li><li><em>Global outlook and job market<\/em><\/li><li><em>What of consumer confidence?<\/em><br><\/li><li><em>U.S. return expectations for 2020<\/em><\/li><li><em>Is it time to buy stocks in May?<\/em><\/li><li><em>And much more.<\/em> <\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!\u00a0<br> <br><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2020_4_20&amp;content=stock_market_outlook_report\">IT&#8217;S FREE. Download the Just-Released Stock Market Outlook<\/a><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2020_4_20&amp;content=stock_market_outlook_report\">2<\/a><\/sup><\/strong><\/p>\n\n\n\n<p>___________________________________________________________________________<\/p>\n\n\n\n<p>It should perhaps come as little surprise, then, that the\nbiggest players in technology are actually <em>hiring\n<\/em>right now. Apple, Google, and Amazon are all looking for software engineers,\ndata scientists, product designers, and other highly skilled workers. Facebook\nsaid this week that usage has soared during this crisis, and given they expect robust\nactivity through the election, they are hiring more than 10,000 people this\nyear for key roles in product and engineering teams. Amazon said that as of\nApril 10, it has <em>20,000 open tech jobs.<\/em><sup>3<\/sup>\nThe list goes on. <\/p>\n\n\n\n<p>The stock market is well aware of the technology sector\u2019s\nrelative strength in the current climate and for the economy at-large. In Q1\n2020, the S&amp;P 500 declined -19.60% while the US Technology Sector fell much\nless, -11.77%. This relative outperformance makes sense given that Microsoft,\nApple, Amazon, Google, and Facebook are the five biggest contributors to\noverall index returns. This performance trend reflects the realities of the\ncurrent economy, but it is not unique to this crisis. Over the last 10 years,\nthe <em>annualized<\/em> return of the S&amp;P\n500 is an impressive +10.53%, but the Technology sector has posted an\nannualized return of +14.84% over the same period.<sup>4<\/sup> &nbsp;&nbsp;<\/p>\n\n\n\n<p>The transition to the digital economy is ongoing and likely\nto accelerate in the wake of this crisis, in my view. I could see more\ncompanies in more sectors speeding-up their ability to operate online, which\nmeans moving to cloud and investing in software and infrastructure. But I could\nalso see astounding and generation-defining changes coming to the biotechnology\nand life sciences industries as well. Walter Isaacson, a biographer, positions\nthese pivotal moments in history in three phases.<\/p>\n\n\n\n<p>In the early 1900s, discoveries helped spur the invention of\ntransistors, radar, semiconductors, spaceships, GPD, and lasers\u2013 all of which\nare invaluable to the US economy today. By mid-to-late century, the economy was\nriding the information technology wave, encoding information into binary\ndigits, or bits. Human progress in this field led to the invention of the\ncomputer, internet, smartphone, and everything mentioned above that is\ncurrently powering growth in the digital economy.<\/p>\n\n\n\n<p>In the wake of this global pandemic, Isaacson argues that we could see a revolution driven by advances in biotechnology. Developing our knowledge and technology in the biotech field could lead to breakthroughs in cancer treatment, vaccines, new medicines to treat viruses and other illnesses, deployment of Artificial Intelligence-powered computer modeling for early detection and treatment, and so on.<sup>5<\/sup> In a time of crisis, it is important to remember that throughout our country\u2019s history, we have often emerged from the worst of times stronger, more resolved, and more advanced and diverse economically than ever before. I don\u2019t think this time will be different.<\/p>\n\n\n\n<p><strong>Bottom Line for\nInvestors<\/strong><\/p>\n\n\n\n<p>The rapid spread of Covid-19 has put incredible strain on\nthe U.S. healthcare system, and it has also exposed weaknesses in the\ngovernment\u2019s \u201cgrasp of complex supply and distribution chains for life-critical\nmedical equipment and other goods,\u201d according to former Google CEO Eric\nSchmidt.<sup>6 <\/sup>Technology companies like Amazon can help fix this issue.\nThere is also a burgeoning opportunity to further develop additive\nmanufacturing (3-D printing), which in the current crisis is helping some\nhospitals manufacture respirator valves to use on patients and to potentially\nsave lives. The list goes on.<\/p>\n\n\n\n<p>Many of the \u2018evolutionary\u2019 economic changes I discuss in\nthis week\u2019s column have actually been underway for some time across the global\neconomy, but this crisis is making many of us more acutely aware of them. Companies\nhave been gradually moving to the cloud, developing digital infrastructure to\nrun a business, shifting sales to e-commerce, running virtual meetings on Zoom\nand via webcasts, and so on down the line. If anything, this crisis is likely\nto <em>accelerate <\/em>a trend that was\nalready happening, encouraging more sectors to move more quickly in the digital\neconomy\u2019s direction. <\/p>\n\n\n\n<p>At the end of the day, experiencing job losses and a\nrecession causes many folks to think very short term, focusing only on the economic\npain happening <em>now. <\/em>But if we keep\nfocus on the long term and how we will make progress and innovate, it is easier\nto envision an economy that is bigger, stronger, and more resilient in the\nyears ahead.<\/p>\n\n\n\n<p>To help you focus on the big picture and the fundamentals instead of the fearsome headlines, I am offering all readers our\u00a0<strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2020_4_20&amp;content=stock_market_outlook_report\">Just-Released Stock Market Outlook Report.\u00a0<\/a><\/strong><br> \u00a0<br> This Special Report is packed with newly revised predictions that can help you base your next investment move on hard data. For example, you&#8217;ll discover Zacks\u2019 view on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li> <em>Top four &#8220;stay-at-home&#8221; sectors at play<\/em><\/li><li><em>\\What stocks would come to life with a vaccine?<\/em><\/li><li><em>Top stocks in top industries<\/em><\/li><li><em>\\Global outlook and job market<\/em><\/li><li><em>What of consumer confidence?<\/em><\/li><li><em>U.S. return expectations for 2020<\/em><\/li><li><em>Is it time to buy stocks in May?<\/em><\/li><li><em>And much more.<\/em> <em>&nbsp;<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!<sup>7<\/sup><\/p>\n","protected":false},"excerpt":{"rendered":"<p>How the pandemic will accelerate evolutionary changes in technology and the economy<\/p>\n","protected":false},"author":3,"featured_media":7430,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-8600","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8600","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8600"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8600\/revisions"}],"predecessor-version":[{"id":10615,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8600\/revisions\/10615"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8600"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8600"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8600"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}