Shares of Camping World Holdings, Inc. (NYSE:CWH), Planet Fitness, Inc. (NYSE:PLNT), and Mastercard (NYSE:MA), are up 10%, 6%, and 5%, respectively, Friday afternoon as markets are recovering some of Thursday's massive losses.
Friday's optimism across the markets likely stems from the belief that the Trump Administration and Congress will be willing to take whatever measures are necessary to avoid the worst potential economic impact from the COVID-19 coronavirus outbreak.
The University of Michigan Consumer Sentiment Index fell to 95.9 from 101, but that wasn't as dire as economists estimated, and it wasn't far off of 2019's average reading. The better-than-expected reading suggests consumers understand this is a temporary speed bump rather than a long-term problem that will change their daily lives and spending permanently.
That said, we'll have to wait and see if the reading plunges going forward as more people realize the gravity of the outbreak and its potential to slow the economy.
Camping World has been the hardest hit of these three stocks over the past month, which is easy to understand as camping season officially kicks off next week, and its business would be seriously disrupted if the economic effects of this crisis cripple consumers' budgets or willingness to travel for vacations and camping.
Planet Fitness will also be hard hit until consumers feel the virus is well under control as the gym seems like a breeding ground for such an outbreak.
Mastercard's exposure is broader, but as COVID-19 has the ability to grind entertainment, gatherings, and the broader economy to a halt, it will obviously take a hit to its business.
Right now, the only thing investors can do is avoid knee-jerk reactions and understand that the markets will be volatile until the outbreak is under control. History has shown that markets will rebound from this, and it's promising to see that new infections in China have dropped to single-digits for the first time since mid-January. As China continues to make progress, it will give consumers hope that the U.S. economy will also work through the disruptions as quickly as possible.