2020 is already shaping up to be an interesting year for investors. While the next few days will determine how much extra uncertainty the markets will have to absorb, the following three trends could see investors profit from profound changes in the economic landscape.
The streaming wars will rage on
With somewhere in the region of 4 million subscribers up for grabs, Netflix is at risk of losing market share. However, what market pundits may be largely overlooking is the amount of churn that could exist in the streaming market. While Disney is experiencing onboarding of millions of subscribers, the novelty factor may end up cutting both ways, with subscribers cancelling after the initial interest.
There are now so many streamers to choose from, such as Bell Media’s Crave here in Canada, as well as other major content providers from HBO to horror platform Shudder, that media consumers may end up holding several subscriptions at once. If this is the case, Netflix may be relatively safe in the long run. And with big names joining forces with Netflix to make award-winning titles, its future seems assured.
Fast food could really heat up
Fast food is one area that may not only survive a market downturn, but actually thrive because of it. A major source of growth in 2020 will be the breakout meatless protein trend. Cheap, cheerful, and ready in minutes, fast food is a go-to in times of economic stress.
As an investment theme, fast food can offer both resilience and rewards. From upside potential to passive income, there’s something on the menu for every stripe of strategist. Alternative protein is a major thread in the green economy and Restaurant Brands is leading the charge against competitors by adding it to menus.
The Battle of the Big Five could reshape banking
With alternative finance options like goeasy and a crowded financials space with five giant lenders continually jostling for the top position, Canada’s big banks could lose market share to each other over the next 10 years. Indeed, given a market correction or an uneven housing crash, the banking landscape could look rather different by the end of the next decade.
However, as with the domestic telecoms space, banking in Canada is somewhat territorial, with different banks having more customers in some provinces than others. Even a glance at their names is telling: Bank of Nova Scotia, Bank of Montreal, Toronto-Dominion Bank, and beyond the Big Five, Laurentian Bank.
On the face of it, this concentration on geographical location may mean that poaching customers isn’t so easy after all. However, when you have banks such as TD sourcing growth in the U.S. and Scotiabank drawing revenue as far afield as the Pacific Alliance, provincial borders don’t mean as much as they used to.
The bottom line
While TD is in a solid position to defend its economic moat next year, a correction could see competitiveness rise among the Big Five. Investors looking to pack growth in their portfolios should look at green economy stocks, with Restaurant Brands a strong play for the alternative protein trend.
