The Tribune

ACTIVTRADES WEEKLY

By Ricardo Evangelista

www.activtrades.bs

The great global lockdown has meant that a large percentage of the planet’s population has seen its way of living changing radically compared with what it was a mere hundred days ago. Many of us now spend the greatest part of our time confined at home, only going out for brief periods of exercise or to buy essential goods such as food and medicine. More than three billion people around the world had to change habits suddenly; students try to adapt to home-schooling, while those in the labour market either lost their jobs or are working from home.

But keeping a country’s economy under lockdown comes with heavy economic costs. In the UK, the Office for Budget Responsibility warned last Wednesday that the coronavirus fallout will cause a drop in GDP in the order of 35 percent during the third quarter of 2020. These are sobering numbers, illustrating the hefty price we will eventually be paying to keep the virus at bay. For some industries the impact has been brutal; think of the hotel and catering businesses that had to close doors, car manufacturers unable to produce or sell vehicles, oil companies, etc; these are very tough times, reflected by the abysmal GDP drops in countries all around the world.

But not all is bad news, some sectors are better positioned to face these extraordinary days. Home entertainment has thrived throughout the last few months, from online streaming of films and series, to the virtual gym with personal trainers offering work-out sessions via Zoom or Facetime. Also, as traditional bricks and mortar retail had to close doors, online shopping - which was already normal for many of us - experienced unprecedented growth. This drove the Amazon stock value to rise by almost 20 percent just during this month of April, reaching a market capitalisation of $1.2tn, making Jeff Bezos, the company’s founder and main shareholder, and already the world’s richest man, even richer to the pace of an additional $24bn.

Another coronavirus winner is Netflix. As the New York stock exchange Thursday’s session came to an end, the video streaming company reached its highest ever market capitalisation, at $192.7bn, overtaking the entertainment industry giant Disney and, even more impressively, the oil industry powerhouse Exxon Mobil, which is now worth “only” $165.6bn.

I’m obviously not able to guess how the, so far, winners and losers of the coronavirus crisis will be faring in the future, however, I believe some of the sudden changes in lifestyle we’ve had to recently endure may be difficult to undo. Working from home is likely to become more common, as will online grocery shopping. Travelling for business may never go back to pre-crisis levels, with many getting used to conduct meetings through digital platforms such as Zoom. These changes will pose an existential threat to many businesses and, as in nature, it won’t necessarily be the strong that survive, but rather the ones able to adjust and adapt.