ETF Trends
ETF Trends

The swine flu epidemic, which could possibly turn into a pandemic, may not just be a hit to our health. It could also be a major hit to stock markets and related shares of exchange traded funds (ETFs).

Many are worried about the economic effects of swine flu as it interrupts day-to-day living, travel and purchases. Some countries are already warning their citizens against travel to Mexico and the United States.

Drug Makers. One beneficiary could be the pharmaceutical industry, though. Certain makers of drugs and vaccines may be caught off guard to the recent epidemic of swine flu, because of commercial orders getting impacted by government stockpile orders from the late avian flu threat.

Drug makers Roche and GlaxoSmithKline are the two big pharmaceutical groups set to benefit most as governments and corporations step up orders for their drugs Tamiflu and Relenza, reports Ben Hirschler for Yahoo! Finance.

Shares in smaller biotech companies soared, as the shares within the two aforementioned companies rose 4% and 5%, respectively. Roche said it was working on scaling up production of Tamiflu but noted that the lead time for the drug from synthesis of the product to packaging was eight months.

  • iShares S&P Global Healthare (IXJ) down 13.7% year-to-date; Glaxo is 4.9%; Roche 5.8% of assets

Retail & Consumer. Sam Stoval talked to Steve Chiotakis on MarketPlace and reports that the broader economic drawbacks of the swine flu hit upon trade and travel as well as day-to-day purchases. A short-term situation aside, if the outbreak were to remain out of control, consumers are likely to stay at home, which would effect gasoline, oil and energy consumption. Purchases on food and leisure items would dwindle, as well.

Airlines. In an effort to secure borders and keep the swine flu contained, the United States is now screening for the swine flu at the Mexican border, and Europe’s Health Commissioner urged Europeans to avoid traveling to the United States or Mexico. Could people hold off on travel altogether because of this?  According to Richard Aboulafia on MarketPlace, at least a half dozen airlines, including American, United and Continental, are waiving penalties for changing flights to or from Mexico.

Upon arrival into the Uinted States from an international flight, expect to be screened in customs, including having your temperature taken. Russia, Taiwan and China are all preparing to quarantine anyone with flu-like symptoms.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.