Analysts Discuss Stock Decline Amid Pandemic

Analysts Discuss Stock Decline Amid Pandemic

( – Along with COVID-19’s public health impacts, there’ve been devastating economic and financial blows, both in the US and around the world. There are obvious issues, such as the massive spikes in unemployment that have accompanied lockdowns and movement restrictions. Then, there are the less apparent effects, such as climbing inflation rates that some argue have come from increased government spending.

What’s Happening With Stocks?

The stock market is another complex piece of the puzzle. The S&P 500, an index experts accept as an indicator of general stock market performance in America, fell sharply in March 2020 before quickly rebounding to record highs. Now, though, analysts are worried about the market’s current and future performance.

As the summer season draws to a close and the Delta variant continues to cause problems across the country, some stock prices are suffering. The S&P 500 remains close to its highest-ever level, but this does not reflect some industries’ pain. Equity investment strategists have noted the majority of stocks have fallen more often than they have risen in recent months.

What Industries Are Hurting the Most?

The S&P 500 tracks large-cap stocks. These are shares of the biggest companies in America; think Apple, Tesla, JPMorgan Chase, and Microsoft. So far, these massive firms have not declined significantly in value, but smaller publicly-listed companies are starting to feel the pinch.

According to a recent report from CNBC, 15% of the stocks on the S&P 500 were recently over 20% below their 52-week highs. In comparison, the S&P Small Cap index, which tracks the performance of smaller companies, showed that 48% of its stocks were more than 20% below this benchmark.

Despite a large uptick in online shopping since 2020, retail is one of the worst-affected sectors. Nordstrom is currently trading 41% below its 52-week high, while Gap is 36% down from this level. An economic slowdown in China is reportedly one of the major factors causing this trend.

So, where do we go from here? Some analysts are hopeful that increased spending over the upcoming holiday season might give markets a boost. However, last year’s season was a flop in this regard. Therefore, if the virus continues to cause problems, could we see this weakening trend persist into 2022?

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