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Hantavirus: why I’m not looking at the next stock market crash… yet


Couple working from home while daughter watches video on smartphone with headphones

Image source: Getty Images

The coronavirus caused the largest stock market crash since 2008-2009. And now we have something new to worry about: the Hanta virus.

Early signs suggest this is not on the same scale. But it may only be important to one person FTSE 100 index Stocks in particular.

Isn’t it another epidemic?

So far, as many as 11 cases of Hantavirus infection have been reported on a cruise ship in Argentina. Many familiar phrases come back again.

Talk of flu-like symptoms, home isolation, and physical distancing are back in the news. But we are far from a full-blown epidemic – yet.

However, there are some familiar events that occur in the stock market. Moderna – The mRNA vaccine company – saw its shares rise 13.95% in the past week.

This isn’t just muscle memory. There is an international effort underway to work on a vaccine and that could be a real boost for the company.

Even if the stock market doesn’t collapse – and I’m not convinced it will – it’s worth noting. This could also be important for a FTSE 100 stock.

Demand for the vaccine

Shares in Croda International (LSE:CRDA) rose during Covid-19. Sales of the company’s lipids (used in vaccines) rose to record highs and inventory followed suit.

Since the end of the pandemic, customers have focused on using existing inventories. This meant that they stopped buying and the company’s sales collapsed.

Moreover, the company did not use its coronavirus windfall well. It has made some bold acquisitions at high prices.

The administration appears to be taking the view that mRNA vaccines are the future. But over the past few years, this has seemed like a big mistake.

However, the Hantavirus outbreak could be a big boost. As inventory levels begin to stabilize, is it possible for inventory to rise again?

Time to purchase?

Increasing vaccine studies may give Croda a boost in the short term. But this – in and of itself – is not a good reason for a long-term investor to consider buying.

Investors once saw what can happen when a temporary surge in demand fades. It would be a grave mistake to forget the past few years.

However, renewed interest in mRNA vaccines may be a lasting trend. In this case, unexpected gains can become more frequent.

This would change the equation significantly for investors. If that’s the case, Croda stock could be really interesting right now.

Business is already showing signs of recovery. Add to that the possibility of increasing vaccine studies in the long term, and I think this is worth considering.

diversification

I’m not a global health expert (although some of my colleagues are). But from what I can see, Hantavirus doesn’t look like the next COVID-19 virus.

It’s too early to start seeing the outbreak as a catalyst for a stock market crash. However, it is worth thinking about what this might mean.

A lot of the stocks I own could be impacted significantly by another pandemic. But that’s not a risk I spend a lot of time thinking about.

Maybe I should. Although there is a lot more to this business, Croda could be a really good way to add some diversification to my portfolio.


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