Has the Global Pandemic Strengthened the Stock Market?

In many ways, the coronavirus pandemic has had an enduringly negative impact on the world. After all, more than three million deaths have been reported worldwide as of April 19th, while the global economy contracted by approximately 6.9% last year.

However, some sectors of the economy have flourished during the pandemic, including prominent examples such as ecommerce, while others promise to experience similar growth as nations across the globe continue to recover from the impact of coronavirus.

But has coronavirus actually strengthened the financial market and global stocks? We’ll explore this below, while asking which stocks are likely to fare best in 2021.

Which Market and Industries Have Fared Well During the Pandemic?

There’s no doubt that the coronavirus introduced increased market volatility throughout 2020, with this having been largely sustained into the new year.

This was particularly evident in entities such as the forex market, which actually saw increased trading volumes throughout the pandemic.

The reason for this was simple; as the quantitative easing measures utilised by national governments sent currency price tumbling and created more opportunities for speculators to profit in a depreciating marketplace.

Some stocks and industries also fared well during the pandemic, particularly as consumer demand and habits were shaped by global lockdown measures. For example, many were compelled to shop more frequently online as corporeal stores were temporarily closed, with this adding an estimated £5.3 billion to UK ecommerce throughout 2020.

In terms of individual firms and stocks, Amazon were the biggest winners here, with the ecommerce giant having enjoyed a £2 billion revenue surge during 2020.

Subsequently, Amazon’s affiliate brands also fared well as the pandemic raged, while there’s no real sign of this trend abating anytime soon.

Who Will Benefit From the Covid-19 Bounceback in 2021?

With the global vaccine rollout now also gathering momentum, some industries and markets that struggled through 2020 are being primed for a significant bounceback this year.

This is especially true in developed economies such as the UK and the US, with at least 32 million Brits having received their first vaccination and more than 20% of North America citizens now fully vaccinated.

This is creating the potential for growth in numerous sectors throughout 2021, which may well attract those of who are interested in indices trading and want to profit from relatively broad asset classes.

Travel and technology stocks are definitely poised to experience sustained growth this year, while cosmetic brands will also fare well as offices reopen and gradually transition away from remote working practices in some instances.

Similarly, off-price clothes retailers may also experience a boost this year, as people look to restock their wardrobe with suitable attire for work and socialising. Remember, the economic climate will remain strained for the foreseeable future, so discount and competitively priced retailers are likely to benefit most from the upcoming uptick in demand.

This will definitely pique the interest of investors, while the retail sector will also benefit as the global economy rebounds in 2021.

Adam Hansen