Whenever I feel sorry for myself in quarantine, I think about my daughter cooped up in her house with three children (four-year-old twins and an eight-year-old, all boys). During Skype calls, the poor woman looks like someone in a hostage video.

For me, it’s a personal reminder that the pandemic is taking a deeply emotional toll on our daily lives. But in crisis there’s opportunity.

Below, I’ll pinpoint an S&P 500 sector that’s poised to rise above virus-induced woes and greatly outperform all other sectors in the second quarter. First, let’s take an unvarnished look at the challenges we face.

The White House yesterday released guidelines for a phased approach to restoring commerce and services. But when social distancing finally ends, don’t expect a “V” shaped recovery. The coronavirus isn’t like a hurricane or snowstorm. Nor is it a normal cyclical recession. It’s a black swan that has traumatized all walks of life.

Consumer confidence has been badly shaken. No one can venture a guess as to how long it will take people to start visiting bars, restaurants, ball games, theme parks, and shopping malls at customary levels of activity.

How long before people feel comfortable boarding airplanes, trains and buses again? Speaking for myself, I don’t dare visit my grandchildren for several weeks if not months, lest I unwittingly infect them.

But Wall Street is determined to shrug off these realities. As of this writing Friday morning, all three main U.S. stock market indices were trading sharply higher, due to optimism over the government’s plan to reopen. There also was considerable buzz today about a possible COVID-19 vaccine.

The bulls are ignoring the fact that much of the government’s plan to reopen lacks not only details but also the requisite testing equipment and federal-state coordination.

They’re also forgetting that developing an effective vaccine takes a lot of time and expense. Even if scientists find a vaccine that works against the coronavirus, it could be 12 to 18 months at best before it’s ready for the public. And that’s only a fraction of how long it usually takes. Meanwhile, the U.S. suffered 4,591 coronavirus deaths Thursday, a record number.

Epidemiologists are warning that the coronavirus pandemic is far from over and happy talk won’t make it simply vanish. Investors who buy into a premature “comeback” narrative are likely to get burned.

China on Friday revised upward its previous death statistics from COVID-19. Beijing also reported today that China’s gross domestic product shrank by 6.8% in the first quarter, marking the first time the Chinese economy has contracted since 1976.

Investors expecting a fast rebound should look at the lessons of history. After the September 11, 2001 terrorist attacks, U.S. air travel was closed for three days. It took about three years for the airline industry to recover. In 2006, when U.S. home construction started declining in advance of the financial crisis and recession, construction didn’t start growing again for another five years.

We could witness a “W” shaped recovery, which involves a sharp decline in basic economic metrics followed by a sharp rise back to the previous peak, followed again by a sharp decline and ending with another sharp rise.

Or the recovery could be slow and gradual, like the curved bottom of a bathtub. All we can say for sure is that we’re currently in a severe recession.

While the U.S Treasury yield curve has normalized at the front end, much of this normalization has resulted from the Federal Reserve’s hyper-aggressive monetary measures.

Profits take a tumble…

Corporate earnings reports started pouring in this week and the results haven’t been encouraging. Major banks have taken huge hits to their top and bottom lines, as they set aside billions of dollars to cover future loan defaults.

According to FactSet, the data provider for Investing Daily, the estimated year-over-year first-quarter earnings per share (EPS) decline for the S&P 500 is -10.0%. The estimated revenue growth rate for Q1 2020 is 1.0%, which is below the five-year average revenue growth rate of 3.5%.

If -10.0% is the actual EPS decline for the first quarter, it will mark the largest year-over-year decline in earnings reported by the index since Q3 2009 (-15.7%).

The energy sector has recorded the largest decrease in expected EPS growth since the start of the first quarter (to -51.5% from +29.6%). Lower oil prices are contributing to the earnings decline for this sector. The average price of oil in Q1 2020 ($45.78 per barrel) was 17% below the average price in Q1 2019 ($54.90/bbl).

Despite the crude oil production cut announced last Sunday by OPEC and its partners, oil prices continue to swoon due to demand destruction caused by the coronavirus pandemic.

Read This Story: OPEC’s Oil Cut: Big Deal or Big Dud?

Headline retail sales in March plunged a record 8.7% compared to the previous month. All major retail categories were hammered. As retail sales decline, the consumer discretionary sector has recorded the second largest decrease in expected EPS growth since the start of the first quarter (to -33.1% from +1.2%).

With factories shuttered and orders drying up, the industrials sector has recorded the third largest decrease in expected EPS growth since the start of the first quarter (to -28.9% from -0.5%).

This one sector will outperform…

Looking forward, the earnings story remains grim. For the second quarter of 2020, analysts are projecting an overall EPS decline of -20.0% and a revenue decline of -3.8%.

But there’s one sector projected to post EPS growth in the second quarter: utilities. Take a look at the chart.

Q2 EPS growth is on track to be negative for all 10 other sectors, but for utilities, it’s projected to reach a healthy 5.9%.

This projected outperformance is largely due to the fact that utilities are classic “essential services” plays. Regardless of economic cycles and market ups and downs, everyone needs electricity.

U.S.-based utilities derive zero revenue and earnings from overseas. Not only are they immune from the coronavirus, they’re also insulated from the Sino-American trade war. Although the trade war has been pushed off the front pages by the pandemic, a slew of expensive tariffs remain in effect. These tariffs don’t directly affect utility revenue and earnings.

Income investors covet the high dividends from utilities. These businesses tend to be stable, generating growing dividends and stock price appreciation over time. Utility stocks add ballast to a diversified portfolio. And as the above chart shows, they’re also a rare source of growth right now in a virus-devastated economy.

For our research team’s latest “dividend map” of value plays in the utility sector, click here.

John Persinos is the managing editor of Investing Daily. He also edits the premium trading service, Utility Forecaster. Reader letters are welcome: mailbag@investingdaily.com