Just as no man is an island, no economy operates in isolation. In the wake of the Covid-19 pandemic, China’s moment of crisis has caused a ripple effect across the global economy. Chile is reeling from reduced copper demand, Germany from auto part shortages, OPEC from an oversupply of oil and the North American automotive subsector from shortages of electrical components. The same goes for Southeast Asia, where most of the populace are staying at home with only those designated as ‘essential’ continuing to go to work. So, this begs the question, what is it going to be like post-Covid 19? As investors, companies or individuals looking to start a business, what industry is faring well or maybe even thriving?
Let us look at some facts first. S&P global did a fantastic job analysing sectors most and least affected by Covid-19 so far. They leveraged the Credit Analytics Probability of Default Model Market Signals (PDMS) which uses stock price movements and asset volatility as inputs to calculate a one-year probability of default (PD).