The acute impact of the coronavirus continues to be felt right across the global economy. These six charts from CNBC demonstrate what we're all feeling - with a dramatic impact on growth levels, manufacturing rates, services, oil prices and the value of stocks.
But while the world has slowed down in a bid to beat the virus, it hasn't stopped completely. Indeed, the coronavirus has delivered volatility to markets and as all traders know - especially those who have a thorough understanding of forex and how it works - this presents opportunities as well as challenges.
So, what can traders do during a time of crisis to enhance their chances of coming out the other side positively? This post will explore the four things to 'look for' when charting your path through stormy economic seas.
Look for expertise
It's understandable that you might feel a little confused about the best way forward. Your existing plans might well have been thrown up in the air by recent events. At times like this, it pays to take a step back, remove emotions and re-consider your strategy. It's well worth taking the time to read expert insights on the sorts of trading techniques that have proven effective in the past. This guide from IG, for example, includes a recommendation for the excellent Technical Analysis of the Financial Markets by John J Murphy.
Look for demand
As stated above, the market hasn't stopped. Indeed, some areas have found themselves under a heightened demand. Warehousing and logistics are more important than ever in the battle to keep the shelves stacked at food stores during panic buying. There's also demand for antibacterial gels and washes and, most importantly of all, a potential vaccine, swift testing kits and medicines to mitigate symptoms. Any company that can deliver appropriate medicinal supplies at a large scale will certainly enjoy a big economic benefit.
Look for innovation
This crisis also demands new products. Whether that's a high-tech disinfectant to safeguard a health care setting, thermal scanners or air purifiers, tech entrepreneurs can pivot to put their knowledge and expertise into new products that befit a world keen to get back to doing the work and leisure activities they took for granted previously. An innovative new product could drive growth for a company or even a whole sector.
Look for changing habits
The need to work from home for prolonged periods is going to force people to get used to new practices. That could well be good news for apps, software and technology that facilitates remote working. People who can provide secure VPN tools at scale, server providers who can keep large scale businesses working, video conferencing programs that enable meetings and training to continue and collaborative working tools that knit together disparate teams will all have a heightened need. But that might not pass. For a long while now, there's been a trend for flexible working. This crisis may instead show many, many more people what's possible - and create long term opportunities for market leaders to thrive in this sphere. Smart traders should be thinking of other ways in which the post corona world might be altered and spot early opportunities to invest in sectors that should benefit from these trends.
