Jeff Fawkes is a seasoned investment professional and a crypto analyst. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.
Bitcoin price is down 12.5%, S&P 500, Nasdaq indexes as well as companies like Berkhire Hathway has also lost significantly since the beginning of the year. Oil war adds fire to the financial crash party.
Since the year beginning, the halving hype was striking the news. Many of the industry experts issued predictions of a sharp price increase. However, even despite the halving that will make Bitcoin more scarce, coronavirus is drowning the markets. Bitcoin has gained a lot, yet lost -12.5% since January 1.
The S&P 500 index is showing a fall by -28.5%. The stock market is losing strength as the investors losing hope for a quick quarantine, and the relief from the virus. For Bitcoin bulls, the current picture must be looking very good, as the ‘store of value’ argument wasn’t in a full crash this week.
Royal Caribbean Cruise Stock Lose Almost All the Price
Royal Caribbean Cruises Ltd (NYSE: RCL) now left without profits, as the ships will not be accepted by any major port city. Some of the cruise liners already on quarantine, then – people are still worried about the contamination. The ships look more of a danger than a safe haven. People will not travel just for fun in the next few months, apparently. Following the feeling that the cruise business will not be bringing any profits in the coming months, investors got rid off the stocks. It lost -82% since January 2020. Hilarious fall for one of the most profitable industries in the world, with a yearly income of up to $11 billion.
No Travels, Exxon Mobil and Delta Air Lines Lose
Thanks to the fact that normal people are now sitting in their homes, not traveling around the planet, the stocks of transport companies fall. Delta Air Lines Inc (NYSE: DAL) lost -62.3% since the beginning of the year. Exxon Mobil Corporation (NYSE: XOM) got -52.4% since January.
The transport industry is heavily involved in the oil war. Russia, Saudi Arabia, and China have inked (and un-inked) some controversial deals, meaning that since March 31, OPEC countries will extract more, not less.
After Russian refusal to support the oil market by extracting less, Saudis have decided to do the same. They also offered China a discount of 6 dollars per barrel in case they get interested. As a result, Russian Ruble losing its price too, as China was buying more than 40% of all the volume. Now, Chinese companies will buy oil from Saudi Arabia, citing American sanctions as the formal cause. The oil prices are testing the historical minimums of $20 per barrel. The Air industry needs oil, and the price decrease can be a good chance for the companies to buy it on the dip.
They won’t be able to make money for some time, however.
Nasdaq, Apple, Berkshire Hathaway Lose 1/5 of the Price
Nasdaq has lost 19.7% since 1 January 2020, while Apple Inc (NASDAQ: AAPL) stock is worth 22% less than before. Apple’s plants in China are under quarantine, despite the unofficial YouTube reports that the Apple plants continue operations in a slow mode. Many of the investors think that the company won’t deliver the new models of its well famous devices.
The Warren Buffett‘s den, Berkshire Hathaway (NYSE: BRK.A, BRK.B), lost ¼ of the capital thanks to coronavirus. The -24.9% decrease is the possible payback for Berkshire’s investments in the mainstream banks. Berkshire holds Wells Fargo & Co (NYSE: WFC) stock (9.9%), Bank of America Corp (NYSE: BAC) stock (6.8%), American Express Company (NYSE: AXP) – (17,15%), and others. However, they also invested a ton of cash into Kraft Heinz Foods Co (NASDAQ: KHC) -(26.8%), and the retail companies like Duracell, Dairy Queen, Coca Cola Co (NYSE: KO) and more.
Notably, Berkshire also holds the stocks of United Airlines and Delta Air Lines. The Berkshire portfolio was rising for the last 20 years, now it falls. Warren doesn’t seem too worried, claiming that he won’t sell his stocks. Buffett doesn’t like cryptocurrencies and considers that even gold is better than crypto. Gold was tough during this scary period, with the price gaining hard during February and losing only 2% in March 2020.
On March 13, Warren Buffett has issued a letter to the investors where he claims that the access to him and Charlie Munger will be restricted. Per the letter, the annual meeting will happen as planned, on 2 May 2020. However, the attendees won’t be able to physically come to the place. Warren doesn’t want to turn Omaha into a ‘hot spot’ of coronavirus contamination.
That’s why all the investors will have to attend the online Yahoo page, with the special streaming from Berkshire. There, Warren will invite a closed circle of journalists who will ask them questions from the investors. Investors will send their questions via mail directly to those journalists before the 2 of May.
Coronavirus Will Continue Dragging the Markets Down
As people stay at home more, Netflix Inc (NASDAQ: NFLX) stocks gained +2.86%. Everybody watch something, play games or browse the Internet. Since in Russia only 3% of people are reading books, one can only imagine the sudden rise of investments in Russian television companies.
Also worth noting that the red market (which is now in preparations for tomorrow’s possible bloody Monday) favors Tesla Inc (NASDAQ: TSLA) stocks. Stocks have gained +10% since the year beginning.
Unbelievable Elon Musk has managed to keep the company share and reputation afloat. He announced the things important to coronavirus attack. All happened after a Twitter user (and a Tesla owner) wrote to Musk. He claimed that Musk must be ‘such an idiot about this’ and make Tesla plants produce lung ventilators. The man was using rough language, but Musk responded in his usual polite manner. He claimed that they will start making ventilators if there will be a demand. After the newsflash, demand appeared very fast.
Per Bill Gates, a prepared country will handle coronavirus in 6 to 10 weeks. For the countries with a high level of contamination, that’s three to five months, or even more. Bill said he is worried about the poor regions, where they have a lack of medical supplies, equipment, and lung ventilators.