Just when we thought we were putting pandemics and public health crises behind us, “monkeypox” arises. Over the past few weeks, it’s raised eyebrows and guards. And now the new disease is spreading rapidly across the United States.
While less fatal than COVID-19, monkeypox is often more physically uncomfortable than COVID. It causes a body-wide rash and can be especially harmful to pregnant women and young kids. It’s not COVID 2.0. But in terms of seriousness, one could easily say that monkeypox is about as serious as COVID.
That’s why some folks are worried history is about to repeat.
They are worried that lockdowns and quarantine periods are on the horizon. Indeed, just yesterday, the U.S. government declared the current monkeypox outbreak (~6,000 cases nationally) a public health emergency, much as they did with COVID in the early days.
But you need not worry, at least financially speaking.
Monkeypox won’t crush the economy like COVID. It won’t cause widespread lockdowns. Instead, its biggest impact will actually be positive for a certain group of already red-hot growth stocks.
So, let’s forget the mania and instead beat monkeypox by buying these very stocks.
Here’s a deeper look.
What Is Monkeypox?
Monkeypox is a viral disease from West Africa that causes two waves of symptoms. First is the onset of flu-like symptoms, like a fever or a headache. Then the body develops a rash that can get pretty severe over time.
Typically, the rash goes away by itself over the course of two to four weeks. But in severe cases, it can cause permanent scarring. Often, monkeypox cases are non-fatal and are simply very uncomfortable and painful. But certain studies indicate that about 1 in 100 cases are fatal.
The virus is not new. It has been circulating in Africa for decades. However, monkeypox has historically not been prevalent anywhere outside of Africa.
That changed in early May 2022. A cluster of monkeypox cases were found in the United Kingdom among individuals who had travel links to Nigeria. The virus has spread rapidly ever since. And now, for the first time ever, monkeypox is spreading on a community level in the United States.
About 6,000 cases have been reported thus far across the nation. That’s a small number, especially compared to COVID-19. The U.S. has yet to report any deaths, but other countries have reported a few.
Nonetheless, over the past two weeks, the states of California, New York, and Illinois have declared states of emergency due to an uptick in monkeypox cases. That cleared the way for the U.S. government to declare the monkeypox outbreak a national public health emergency.
For some, this is bringing back scary memories. It sounds eerily similar to how things were playing out with COVID-19 back in February 2020. Back then, what came next was an apocalyptic shutdown of the global economy.
Fortunately, history likely won’t repeat. But some major things will change over the next few months, and they’ll have big implications for your stock portfolio.
Is It Impacting the Economy?
Unlike COVID-19, monkeypox is not a new disease.
It’s been around for decades. And because it has, the medical and scientific community know all about it. They know how to treat it. They know how severe it is, what to look for, how transmissible it is, and how it progresses. They’ve developed a vaccine for it.
The current monkeypox outbreak is not a rerun of early 2020. But as investors, that doesn’t mean we should ignore it, either.
Our analysis suggests that the monkeypox outbreak is impacting and changing consumer behavior across the nation.
For example, in California, consumers appear to be going out less. According to data from Placer.ai, foot traffic at retail chains in California had rebounded to pre-pandemic levels in late 2021. However, foot traffic trends have crashed in 2022. And recently, California retail chain foot traffic levels have fallen to just 80% of their pre-pandemic levels:
The same is true in New York and Texas. Both states had completely normalized to pre-pandemic levels of retail foot traffic in late 2021. Since then, levels have fallen to about 80% of normal.
That’s significant. We’re talking a 20% drop in foot traffic at retail chains in the three most economically important states. Together, those three states comprise over $7 trillion in annual GDP — more than 30% of the entire country’s GDP.
In other words, about one-third of America’s economy is experiencing 20% less foot traffic today than a few months ago.
And it’s summer, the time of year when everyone is usually going out and when diseases don’t spread as quickly. Imagine what’ll happen in the fall and winter. You could see 30% or 40% drops in traffic!
That’s going to show up in company earnings reports later this year. And it’s going to send some stay-at-home stocks soaring higher.
What Are the Monkeypox Stocks to Buy?
We think the best stocks to buy as a result of the monkeypox’s effect on consumer behavior are e-commerce stocks.
We don’t think the outbreak will get bad enough to really change core consumer behavior. But as the evidence above shows, it does have the potential to impact consumer behavior at the margin where suitable replacements for physical consumption exist.
For consumers, this most pervasively translates into less in-store shopping and more online shopping. That means it’s time to buy e-commerce stocks.
As you can see in the chart below, the “smart money” may already be positioning for this trade.
The Amplify Online Retail ETF (IBUY) has recently broken out of its multi-quarter downtrend. It showed support at critical COVID-low levels and subsequently formed a bullish ascending triangle pattern. From a technical analysis perspective, that means that if the e-commerce ETF breaks out of this ascending triangle in a bullish manner, the ETF could be in the midst of a massive turnaround.
We just got that bullish breakout last week.
The chart is now telling us that e-commerce stocks could rise 50% in a hurry and nearly triple by next year.
With stay-at-home behavior making a mini-comeback thanks to monkeypox, we think this massive upside move in e-commerce stocks is likely.
The Final Word
In case you haven’t noticed, the stock market has shaken off its rust and has been ripping higher recently.
July was the best month for the stock market since 2020. And leading that rally have been secular growth stocks.
Believe it or not, this big rally may still be in its early innings.
Multiple fundamental and technical indicators support the idea that this is not just another bear market rally. Rather, it’s the start of a brand-new bull market. If so, fortunes will be made by investors over the next 12 months. Fortunes are always made when bear markets turn into bull markets.
And in 2003, after the dot-com crash, there was another bear-to-bull-market turnaround. In that year, FARO Technologies (FARO) popped 1,194%. 8×8 (EGHT) rose 1,922%, and Axon (AXON) stock surged 1,933% higher.
You get the point.
When the market enters a generational turnaround from bear to bull market, investors are presented with a plethora of 10X opportunities.
Fortunes are made in times like these. And they are made rather quickly.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.