Name User

I fully fund my 401k in Jan and Feb of each year. So I'm kinda screwed in that regard. Ugh.

It's not so much the virus killing people that will lead to industry turmoil, it's the huge reduction in demand that accompanies that. Imagine carriers parking their fleets for several months. I mean outright parking. It won't matter that gas is cheap, because planes won't be flying.

The economy is interconnected, and as cracks start to form and companies announce layoffs, consumers will start to cut back on spending. That is what will lead to a recession, and it might not be a mild one.

So we have two major issues here...the first is a huge drop off in actual travel and parking planes followed by consumer sentiment dropping off a cliff as the media continues its minute by minute fear mongering. As an example, CNN had a map of the US with confirmed virus cases, and colored the states in bright red. Just a subtle hint right there.

Normally airlines have a built in hedge against recessions with fuel prices, since it's such a large % of costs. That doesn't help in cases like this where it's a two pronged hit on the industry (similar to 9/11, but much worse in demand drop off). On the flip side, we saw that in late 2015-early 2016 when the economy started slowing down and fuel prices plummeted....but profits soared.

There have been several positive signs that a vaccine may have been successfully created. Let's hope it works.

forgot to bid

8,000,000 people live in Hong Kong, they got 93 cases and of those 2 deaths.

Scary stuff.


/s

tomgoodman

Your mistake will soon be corrected when the thread gets closed for politics and insults.

forgot to bid

If Delta stock falls below $40... I'm buying more. I made a lot of money off this stock.

Apple is in the 260s... lowest since November... ugh... buy? Yeah? Nay? I always ask pilots for investment advice.

Aero1900

Buy stocks. They are on sale right now. Buy low and hold.

Be greedy when everyone else is fearful

C5Drvr

Furlough probably not gonna happen.

http://www.audriesaircraftanalysis.c...-pilot-demand/


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Karnak

Whew!

I’m glad to hear that! For a few days there I thought travel and bookings would be down, and that would cause some financial strain on our airlines. Thanks goodness the populace accepts your logic, and the money is still streaming in! I gotta go pack for my PEK trip now...don’t want to disappoint the throngs of people trying to get there.

GoneMissed

I don’t think Covid 19 is as big of a deal the media is making it out to be; but it is not something to be taken lightly. That’s just my humble opinion.

Some are stating that the flu is much deadlier and scarier than Covid19 since the flu kills 40,000 on an annual basis. But that number doesn’t tell the whole story.

The flu has a mortality rate of 0.1% whereas with Covid19 it is hovering at about 3% (so far). A 30 fold increase compared to the flu. If the same number of people in the US are infected with Covid19 as they are with the flu; the death rate in the US would be 1.2 million/year. I don’t think the mortality rates in the West will be as high as they are in China; but only time will tell. Our health care systems are much better equipped to deal with this outbreak than China.

With that being said, not only are fear and panic driving the markets; but the fact that the supply chain has been seriously disrupted is also causing major economic concerns.

Do I think the markets will stabilize by the spring? Absolutely.

The markets were due for a correction as far back as Oct 2019 when the Dow was hovering at about 25000. Right now we are in correction territory; but the question that begs to be answered is how low will the markets go? Will Covid19 concerns cause it do drop even more so? I think it will. Since the supply chain has been disrupted; companies are already reporting they are missing out on earnings and are adjusting their growth forecasts. Imports/exports will all decrease across most sectors. How will companies cope in the short to medium turn? They will start with cutting expenses – travel, conferences etc. And if earnings continue to miss, companies will start laying off people.

I don’t think consumer sentiment will rebound as quickly as some predict. Folks that may have been planning family vacations are taking stock of their finances are realizing maybe it is best to hold off on that trip to Disneyworld in the summer. As a nation, we have too much consumer debt; most Americans can’t come up with $1000 cash for an emergency. I think the Covid19 scare may change financial decisions families are making in terms of discretionary spending – i.e. vacations and entertainment. Psychology drives consumer sentiment; even though at times that sentiment is irrational. I don’t foresee a major economic downturn as we saw in 2008/2009 but I don’t think we will also be back to business as usual as quickly as some think. I think the dust will settle after 6 to 18 months. Covid19 will subside by the spring; big pharma will have a flu vaccine for the next season with the Covid19 strain. But I think it will take longer for the economy to recover. I hope I am wrong.

Just my 2 cents worth.

feltf4

you started it like any new article out there. Pure doom.. and you wonder why people think that this virus is going to kill us all.

at6d

It’s a nice break from the climate change debate.