Market Predictions And The Business Implications

By: Submissions

Predicting movements within markets when things are operating as usual can typically be quite simple - whilst unexpected changes may cause some movement there tends to be a lot of flexibility to cover that movement. However, when we experience a global crisis such as the one that came in the 2008 housing crash and now in the coronavirus pandemic, the range of factors that can cause movement in a market are much higher, much more volatile, and can be much more unexpected. Fear has always served as a motivating factor for a shifting market, as uncertainty grows around how much movement we may see, those afraid to face big losses may change their position during a difficult time, which in turn causes more fear in the market.

Some predictions and the implications on the business around them have been much easier to see - following the closure of many borders and entire fleets of planes being grounded, it was a relative certainty that the aviation industry as a whole would struggle, and that’s exactly what we have seen. In  an effort to curb any big losses and prevent solvency issues, many are asking for bailouts, but as we also see certain economies as a whole taking big drops, it leads to some uncertainty around just how much help can be given without too much of a negative effect - as we move forward however, those predictions may become more difficult as the recovery period isn’t as easy to predict - many would hope to see a fast recovery but that may not be the case. 

But that isn’t to say that all predictions were so clear cut - and the gaming industry serves as a good example. We’ve seen huge gambling hubs such as those within Las Vegas and Macau experience shutdowns of their own, but as many have moved to an online platform they have managed to come through on top. Betting operators have taken a bit of the brunt of the hit as a few took some drops in share price, and this was already following regulation changes that would block access to the services for tens of thousands of users - but not all were affected, a list of those here show many outside of the regulation that operate independently who have also found a huge amount of success where others struggle. Seeing locations experience a drop as much as 60% in share price, just as with the aviation industry, fear may have led to a change in position, but this had no impact on the online casinos who continue to perform extremely well and see huge daily increases in traffic.

It will take some time before we see the full economic impact of this crisis, and many will look to the businesses both struggling and succeeding to form their predictions going forward - however not all businesses operating within the same market are experiencing the same issues and where the implications of using this may fail, so do the predictions.

By Adam Walker

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