New Covid-19 Cases Increase, 5 Defensive Stocks To Buy
Zacks Investment Research | Feb 12, 2020 10:03PM ET
On Feb 11, China’s National Health Commission’s stated that the number of new, confirmed cases declined to 2,478 from 3,062. However, the very next day, 242 new deaths were reported, nearly double the previous day's toll. The number of confirmed new cases in Wuhan alone touched 14,840 as of Feb 12.
Officials adopted a new methodology for counting the number of infected people, which reflected the steep increase in death toll.
CDC Fears Covid-19 Could Spread in the U.S.
In the United States, 14 cases of Covid-19 have been reported so far. More than 600 people have been quarantined, after being flown out of China, a week before. On Feb 12, the Centers for Disease Control and Prevention (CDC) had warned that the virus can “likely” spread in America.
Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases said the health officials “should be prepared for this new virus to take a foothold in the U.S." In fact, CDC is constantly communicating with and monitoring medical supplies manufacturers to make sure that there are enough masks and gloves in case of an outbreak.
Why Play Defensive?
With the rise in Covid-19 cases in Wuhan and China, airlines have canceled flights and schools have extended holidays for an indefinite period. Even though factories are reopening, the turnout is minimal as fears of virus spread remain a major concern.
The outbreak has disrupted trade and multi-national companies’ outlook. Companies have been forced to find alternatives and shift manufacturing to the United States and Mexico.
Hence, amid the current uncertainties and fear driven by the spread of Covid-19, investing in defensive stocks like healthcare can be beneficial. Defensive stocks provide stable returns regardless of market conditions. Demand for these products or services is constant irrespective of market gyrations as these cater to basic human necessities.
However, these stocks do not give high returns when the economy is expanding, compared to technology and cyclical sectors.
Our Picks
We are presenting five defensive stocks. What’s more, each of our picks sports a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research
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