Major indexes fell sharply on Jun 24 as spike in coronavirus cases in the United States sparked fears of new rounds of lockdowns, which could eventually worsen the economic damage from the pandemic. The Dow, the S&P 500 and the Nasdaq closed 2.7%, 2.6% and 2.2% lower, respectively, for the day.
While the Nasdaq posted its first daily decline in nine sessions, all the three benchmarks reported the worst day since Jun 11. These benchmarks were picking up pace in the past few weeks as easing of lockdowns helped airlines and other hard-hit sectors. However, the increase in new cases dealt a fresh blow, compelling investors to steer clear of risky assets. Instead, they parked their money in safe-havens like gold.
Coronavirus Flare-Up May Dampen Economic Recovery
On Jun 23, Florida reported 5,508 new COVID-19 cases, and the rate of people tested positive rose to 15.91% from 10.82%. On the same day, California and Texas reported 7,000 and 5,489 new cases. Additionally, the spike in new cases in Florida forced Disney to postpone its reopening. Shares of the theme-park giant dropped 3.9% during the session.
The governor of Texas urged residents to stay at home and asked cities and counties to impose stricter rules. Per data analyzed at Pantheon Macroeconomics, Texas’ number of people currently hospitalized jumped by 5%, marking the steepest one-day increase since Apr 14.
In fact, governors of the states of New York, New Jersey and Connecticut ordered visitors from certain hotspot states to quarantine for 14 days. And this pulled down shares of United Airlines, Delta Airline, American Airlines and Southwest by more than 7% on Jun 24.
What dampened sentiments further was International Monetary Fund (IMF) slashing the global outlook. IMF said that the pandemic was causing wider and deeper damage to economic activity than initially predicted, leading government deficits to soar. IMF now forecasts global output to shrink 4.9% in 2020, compared to 3% estimated in April.
IMF also noted that mass job cuts and business closures would slow down the process of recovery for the world economy. The organization now projects global growth in 2021 at 5.4%, which is far below its pre-pandemic projections. Additionally, IMF now projects that the U.S. economy will shrink 8% in 2020 before expanding 4.5% next year.
5 Gold Miners to Buy Now
Coronavirus jitters led to sell-off in equities on Jun 24, and investors rushed to traditional safe havens, such as gold. This rally helped the yellow metal to close at its highest level since 2012, closing at $1,775.1 per ounce for the day.
Given the resurgence in coronavirus cases, investors may benefit from investing in these five gold mining stocks. These stocks belong to the Zacks Mining - Gold industry, which has a projected earnings growth of 21.7% for the current year.
Galiano Gold Inc. GAU engages in the exploration, development and production of gold properties. The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for its current-year earnings has moved up more than 100% over the past 60 days.
Galiano Gold sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold Corporation GOLD engages in the exploration, mine development, production, and sale of gold and copper properties. The company’s expected earnings growth rate for the current year is 54.9%. The Zacks Consensus Estimate for its current-year earnings has moved up 8.2% over the past 90 days. Barrick Gold holds a Zacks Rank #2 (Buy).
U.S. Gold Corp. USAU operates as a gold exploration and development company. The company’s expected earnings growth rate for the current year is 57.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 33.6% over the past 60 days. U.S. Gold holds a Zacks Rank #2.
Harmony Gold Mining Company Limited HMY engages in the exploration, extraction, and processing of gold. The company’s expected earnings growth rate for the current year is 28.6%. The Zacks Consensus Estimate for its current-year earnings has moved up 5.9% over the past 60 days. Harmony Gold Mining carries a Zacks Rank #2.
AngloGold Ashanti Limited AU operates as a gold mining company. The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for its current-year earnings has moved up 4.4% over the past 90 days. AngloGold Ashanti carries a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
Harmony Gold Mining Company Limited (HMY) : Free Stock Analysis Report
US Gold Corp (USAU) : Free Stock Analysis Report
Asanko Gold Inc. (GAU) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research