If the markets weren’t walking on eggshells already, they didn’t need an outbreak of swine flu to put them back in the intensive care ward. We’ve been looking for proximate causes for a pullback in the markets, but swine flu wasn’t one of them.
For the ultra-cynical, start shorting airline stocks like Southwest Airlines (NYSE: LUV) and Delta Air Lines (NYSE: DAL), and buying any biotech that has to do with flu vaccines or heap masks. It’ll be the knee-jerk reactions to any whisper of plague.
But it might be too late to go that route for investors; the biggest gains have already been made. For traders it’s a different story – they should love the volatility this adds.
For investors looking for what’s next – we suggest taking a look at the list of your favorite companies again. You know, companies like General Electric (NYSE: GE), Bank of America (NYSE: BAC), Alcoa (NYSE: AA) and Exxon Mobil (NYSE: XOM) to name a few “best in breeds.”
If this swine flu has the effects of bird flu or a SARS type of outbreak, then we could be seeing real drops in market confidence, and the long-term buying opportunities that we’ve been waiting for.