Tracing 2020’s deep trends, in stocks

Virus apocalypse, riots, presidential election. These are the trends of the year. Looking deeper, there are other, subtler, but probably longer lasting trends. We can track the emergence of these trends by following stock prices in different sectors.

Decentralized rules

Companies with products that enable physical decentralization have prospered. Most notably, Amazon (AMZN), Netflix (NFLX) and Zoom (ZM). These companies allow us to shop, find entertainment, and communicate in a physically separated world. Peloton (PTON) is giving people engaging in-home workouts.

The payments processors that enable distributed commerce are also booming: Square (SQ), Visa (V), Mastercard (MA), Paypal (PYPL).

Cloud software providers also power the emergence of distributed living companies: Atlassian (TEAM), Slack (WORK), Twilio (TWLO).

The rise and rise of the suburbs

The suburbs are back. The coronavirus and urban unrest are pushing urban residents out. Meanwhile, many companies are embracing remote work, leaving even fewer reasons for residents to stay in cities.

Companies supplying suburban households are also doing well, including Home Depot (HD), Lowe’s (LOW), Best Buy (BBY), Target (TGT), Costco (COST), Proctor & Gamble (PG) and Walmart (WMT).

Energy shifts, maybe for good

Oil companies faced an unprecedented collapse in consumption. In April 2020, the US oil consumption was 27% lower than the previous year. Oil consumption has not declined at that rate since the Energy Information Agency (EIA) began keeping records in 1962. Daily consumption reached a level not seen since 1983.

Oil stocks also took a hit. ExxonMobil (XOM) hit historic, 20-year lows. Chevron (CVX) and Occidental (OXY) have taken a beating. BP (BP) and Shell (RDSA) have hit all-time lows. Oil service companies Halliburton (HAL) and Baker Hughes (BKR) have suffered epic collapses.

Banks hit a rough patch

Banks have less opportunity for revenue with the return of near-zero interest rates. They also have the possibility of troubled assets with commercial real estate being under so much pressure. Bank stocks like Wells Fargo (WFC), JPMorgan (JPM), Citigroup (C), US Bancorp (USB) have struggled.

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