Investment in Post Covid-19 world

Consumer spending/behavior in Post Covid-19 world ( Till the vaccine )

Job report - May 8 can give some clues : Main highlights
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leisure and hospitality  - 7.7 Million or 47 % (food services and drinking places - three quarter)

Employment declined by 2.5 million in education and health services in April. In health care, employment declined by 1.4 million, led by losses in offices of dentists (-503,000), offices of physicians (-243,000), and offices of other health care practitioners (-205,000). Employment also declined in social assistance (-651,000), reflecting job losses in child day care services (-336,000) and individual and family services (-241,000). Employment in private education declined by 457,000 over the month. 

Professional and business services shed 2.1 million jobs in April. Sharp losses occurred in temporary help services (-842,000) and in services to buildings and dwellings (-259,000).

In April, employment in retail trade declined by 2.1 million. Job losses occurred in clothing and clothing accessories stores (-740,000), motor vehicle and parts dealers (-345,000), miscellaneous store retailers (-264,000), and furniture and home furnishings stores (-209,000). By contrast, the component of general merchandise stores that includes warehouse clubs and supercenters gained 93,000 jobs. 

In April, manufacturing employment dropped by 1.3 million. About two-thirds of the decline was in durable goods manufacturing (-914,000), which saw losses in motor vehicles and parts (-382,000) and in fabricated metal products (-109,000). Nondurable goods manufacturing shed 416,000 jobs.

Employment in the other services industry declined by 1.3 million in April, with nearly two-thirds of the decline occurring in personal and laundry services (-797,000).

Government employment dropped by 980,000 in April. Employment in local government was down by 801,000, in part reflecting school closures. Employment also declined in state government education  (-176,000).

Construction employment fell by 975,000 in April, with much of the loss in specialty trade contractors (- 691,000). Job losses also occurred in construction of buildings (-206,000).

Employment fell in transportation and warehousing in April (-584,000). Transit and ground passenger transportation and air transportation lost 185,000 jobs and 141,000 jobs, respectively.

Wholesale trade shed 363,000 jobs in April, largely reflecting losses in the durable and nondurable goods components.



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So

--- Leisure and hospitality obviously is the hardest hit and the demand in this sector will be slowest to come back .

---Next main hit is "education and health services" , but this should come back expect private education.

--Construction and construction related services was also a big looser but they should come back since they are mostly essentials. You can delay them but can't avoid them.

---Retail sector - It's what you would have imaged - job loss for clothing and others but job gain for warehousing and superstores. This is because of online shopping / delivery vs in store shopping.

--Good manufacturing because of the supply chain issues was the next looser . This should improve but with "U" or "W" shape recovery
     
Conclusion:

A)  Transportation :
     -- People will prefer their own cars vs car pool or public transport .

B) Food Services
      --Take out food will be preferred vs dine-in . Restaurants will be partially filled to maintain 
         adequate spacing between dine-in customers.
      -- Curbside pickups/Online  for most of the shopping.   

C) Healthcare / Fitness
        -- Big Virtual Shift for healthcare -  Doctor Visit , gym / fitness  
        -- Healthy food habits in short run.   

3) Work From Home (wherever possible )
4) Changes  in  Consumer spending  - More spending on cleaning products - sanatizier, soap, cleaning supplies, spending more on connectivity - Internet , VR/AR , Gaming ,
5) Travel & leisure would be the last to recover as 65+ represent around 1/3 of total consumer spending and they will be slowest to go out and spend.

Based on this , I will be looking at the sectors which might have a "V" shape recovery for now.  So no to transportation, healthcare (possible "W" recovery), Leisure and hospitality, Education. Clothing, etc.

Sector/stocks that should have a "V" recovery - warehouse clubs, superstores, Construction and construction related services, Tech - semiconductor industry, Direct to companies tools like salesforce, synopsis , adobe , etc  




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