A very sobering presentation by data aggregator, Womply, that tracks customer spending trends, can be found here. It shows how small businesses have been affected by Covid in the U.S. by sector in the last few days. The impact on cash flows in the near term will be the pacing factor in the recovery that we will see in the economy when things improve.
So far, the spiral downwards is accelerating with some sectors seeing massive dives in demand. Transportation was down -86% year on year (on a weekly basis); arts and entertainment down -56%; lodging down -40% and restaurants down -20%. With the rapidly evolving situation in states, restaurants and lodging have probably not seen the worst yet. On the other hand, it looks like food and beverage shops have had a strong week thanks to hoarding happening across the board.
The liquidity measures taken by banks, governments and authorities that will enable the small businesses to stay afloat either through payment deferrals, moratoriums, stimulus etc. and reaches the small businesses will be key over the next few weeks. As one evaluates the potential options to invest, one cannot but consider the effect of liquidity, capital positions and the ability of the companies to stay afloat in these conditions in various scenarios.
Beowulf Capital 