The darling stocks of the pandemic have crashed back to earth while travel and live event stocks soar, as life returns to something approaching normal.
With vaccines widely available, shares of Peloton have plunged 65 percent this year, and Zoom is down 26 percent, while airlines, hotels and other sectors battered in the pandemic are thriving.
‘The markets clearly sense the pandemic is over,’ Ben Emons, managing director of global macro strategy for Medley Global Advisors, told the New York Times. ‘We’re in a full reopening, and we’re moving toward a normalized situation.’
The market’s assessment comes despite that fact that daily news COVID-19 cases and deaths have leveled off at a fairly high rate nationwide, and are sharply increasing in some states, such as Michigan and Minnesota.
View of the crowd during the 2021 Global Citizen Live festival at the Great Lawn, Central Park on September 25. With reopening, travel and live events stocks are surging
Likely, investors believe that there is little political will for further lockdowns, in particular given the availability of vaccines, and now booster shots, easing the concerns of those most fearful of the virus.
Perhaps no stock was as emblematic of the pandemic as video-calling app Zoom, which overnight became the daily tool of office workers around the world as they worked from home.
Shares of Zoom rose more than 730 percent during their peak last year, but have since plunged precipitously as workers trickled back into offices, and ‘Zoom fatigue’ became a byword for exhaustion with webcam meetings.
Peloton, the maker of the high-priced connected exercise bike, also saw shares soar last year as gyms and exercise classes closed, sparking a fad for the company’s products.
Shares of Peloton rose as much as 440 percent last year, but so far in 2021 have plunged 65 percent, after the company this month slashed its annual revenue projection by as much as $1 billion.
Peloton has also been battered by a recall on its treadmills, after one child was killed and 29 were injured when they were pulled under the moving belt.
After rising more than 400 percent during the height of the pandemic in 2020, Peloton’s stock is now down more than 60 percent so far in 2021
A year-to-date view of Peloton stock shows how the share price has plunged
But the company has also clearly suffered under reopening measures, and some analysts even called Peloton’s share price plunge the official signal of the end of the pandemic.
‘People are no longer trapped at home and competition is growing,’ BMO Capital Markets analyst Simeon Siegel said earlier this month.
Other pandemic plays include Clorox, which became a household staple at the height of the outbreak. Clorox shares are down 16 percent so far in 2021.
Shares of Chegg, which provides widely used technology for remote schooling, are down more than 67 percent for the year.
But some so-called ‘stay at home’ stocks are surviving reopening. Netflix shares remain up 33 percent so far this year, thanks to strong subscriber numbers and smash hits such as Squid Game.
Amazon shares also remain up about 11 percent this year, as many consumers appear to be reluctant to give up the convince of shopping from home even as restrictions end.
Planet Fitness has seen its shares soar 24 percent, and CEO Chris Rondeau has said that gym membership numbers had nearly returned to their pre-pandemic peaks
A year-to-date view of Planet Fitness shares shows how the stock has soared
Meanwhile, sectors that suffered under lockdown are now thriving for the most part.
Planet Fitness, the popular gym chain, has seen its shares soar 24 percent, and CEO Chris Rondeau has said that gym membership numbers had nearly returned to their pre-pandemic peaks.
‘Our height was 15.5 [million members]. We’re 97 percent all the way recaptured back to where we were pre-Covid,’ Rondeau told CNBC this month.
Travel has also roared back into fashion. According to the TSA, airline traveler throughput was 130 percent higher over the past week than the same period last year, and only 15 percent lower than the pre-pandemic level in 2019.
Expedia, the travel booking site, has seen its stock rise 34 percent this year.
American Airlines is up 31 percent, Delta Air Lines rose 5 percent, and United Airlines gained 17 percent.
Yerin Hong gets a hug from her boyfriend Soomin Kim after she arrived on a flight from Germany at the international terminal at O’Hare International Airport on November 8
According to the TSA, airline traveler throughput was 130 percent higher over the past week than the same period last year, and only 15 percent lower than the pre-pandemic level in 2019
Live events, which were nearly completely halted for a period last year, are also now all the rage.
Shares of the concert and event ticketing company Live Nation are up 63 percent so far this year.
Cruise lines have also rebounded, with Royal Caribbean up 18 percent for the year.
‘The stay-at-home stocks were the place to be because that was where the growth was,’ Eric Mintz, portfolio manager at Eagle Asset Management, an investment firm in St. Petersburg, Florida, told the Times.
‘When you’ve got this surge in reopenings, obviously you’ve got a number of companies doing very well, and industries,’ he said.
But Mitz warned that as the economy improves, growth-focused investors don’t need to crowd into ‘just a handful of stocks.’