- Airlines: Government intervention should help some carriers, though the situation remains fluid. The longer the fear and the travel restrictions persist, the more carriers may be at risk.
- Autos: The impact of COVID-19 will likely be another blow to the already struggling auto sector. Many auto manufacturing plants in China shut down in early February and only began reopening in the first two weeks of March.
- Energy: While the oil companies are in for a tough ride, the implications for natural gas may actually be positive, in our view. As US oil production falls, natural gas produced in the oil wells will fall as well. This should lead to a rebalancing in the market over the next year as natural gas producers had already moved into maintenance mode prior to the recent downturn.
- Pharmaceutical: We expect a relatively medium impact to the supply chains associated with pharmaceutical companies. Pharmaceuticals remain an essential product and as such, should experience limited impact absent a prolonged disruption.
- Consumer Staples: We expect COVID-19 to have a mixed impact on the consumer staples sector. While the impact on packaged food and home and personal care companies should be limited, certain sub-sectors could experience idiosyncratic pressures.