Economic collapse, soaring unemployment, political destabilization, worsening geopolitical tensions, and the rise of virulent nationalism: it’s beginning to look a lot like the 1930s.

We’ll see if the severe 2020 recession lapses into an outright depression. Fiscal and monetary stimulus just might save the day. Below, I’ll explain why you shouldn’t flee the markets. Indeed, amid these dark times, new investment opportunities are being born.

To be sure, we’re witnessing some of the most volatile weeks on Wall Street since the financial crisis more than a decade ago. Exacerbating recent volatility is the widespread prevalence of algorithmic trading, which acts as an accelerant for market ups and downs.

Read This Story: Rise of The Machines: Beware of “Robo-Trading”

You can rely on the collective wisdom of the analysts at Investing Daily to help see you through these tough times. Keep investing. But also keep your eyes open to the bad news, of which there’s plenty to go around.

Americans filed 4.4 million jobless claims last week, the Labor Department reported Thursday. Five weeks into the pandemic, unemployment claims now exceed 26 million.

However, investors decided that a Senate-passed coronavirus relief bill worth $484 billion was positive enough to offset the latest job loss data. The bill is pending in the House, where it’s expected to pass today. As of this writing Thursday morning, the three main U.S. stock market indices were trading in the green.

Q1 earnings look bleak…

First-quarter earnings season offers little solace. According to FactSet, the data provider for Investing Daily, the blended earnings per share (EPS) decline so far for Q1 is -14.5%, which is worse than the EPS decline of -10% initially forecast by analysts. Blended constitutes actual and projected results.

Negative earnings surprises posted by the financial services sector is the main culprit for the weaker-than-expected performance. The big banks kicked off earnings season with major hits to their top and bottom lines, as they set aside billions to cover the expected tsunami of bad loans.

If the actual EPS decline turns out to be -14.5% for Q1, it will represent the biggest year-over-year decline in EPS for S&P 500 companies since Q3 2009 (-15.7%). It also will mark the fourth time in the past five quarters in which the index has reported a year-over-year decline in earnings.

Five sectors are reporting or expected to report year-over-year growth in earnings, led by the communication services and utilities sector. Six sectors are reporting or are predicted to report a year-over-year decline in earnings, led by the energy, financials, consumer discretionary, industrials, and materials sectors (see chart).

The blended revenue growth rate for the first quarter is 0.6%. Seven sectors are reporting (or are projected to report) year-over-year growth in revenues, led by the communication services and health care sectors. Four sectors are reporting (or are predicted to report) a year-over-year decline in revenues, led by the materials and energy sectors.

Health care occupies center stage right now, due to the deadly coronavirus outbreak and the rush to find a vaccine. One of the surest ways to make investment profits is to tap into unstoppable trends. Few trends boast as much momentum as global demand for health services.

From rubble to rebirth…

On the other hand, the energy sector is in the midst of a bloodbath. Energy demand destruction around the world is clobbering crude oil prices, which in turn is wiping out energy equity value.

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

Saudi Arabia, Russia and other producers tried to shore up prices with an agreement last week to curtail production by 9.7 million barrels per day in May and June, the deepest cut ever negotiated. The deal fell woefully short. From Riyadh to Moscow and throughout oil producing nations, governments dependent on oil revenue are grappling with crisis.

Many S&P 500 companies have simply withdrawn their earnings projections altogether. The financial metrics commonly used for guidance have been rendered nearly useless by the pandemic.

For the rest of 2020, analysts predict a year-over-year decline in earnings in the second quarter (-26.6%), third quarter (-13.3%), and fourth quarter (-4.8%). Those projections could deteriorate even further as lockdowns drag on.

But remember, one day this pandemic will end. Economies and stock markets always bounce back. History shows that in the aftermath of economic crisis, wars and plagues, the human spirit is indomitable.

Recovery from disaster often arrives with surprising speed and breadth. From the rubble of the 2008-2009 great financial crisis arose the longest bull market in history.

When the coronavirus crisis inevitably subsides, certain sectors will rebound more strongly than others. Two sectors poised to reap outsized gains in the post-COVID world are technology and health care.

The virus has caused a permanent shift in consumer behavior in regard to mobile/collaborative technologies. The pandemic also has raised consciousness about the need to enhance health services around the world.

The overall situation seems grim right now but don’t panic. Increase your exposure to safe havens. Make sure you have gold plays in your portfolio.

Stay cautious but also stay invested. To borrow a phrase from a previous American president: “The only thing we have to fear is fear itself.”

Questions about portfolio protection in these fraught times? Drop me a line: mailbag@investingdaily.com

John Persinos is the editorial director of Investing Daily.