With President Biden declaring that “the pandemic is over” on 60 Minutes last night, we thought we’d take a look at stock market performance since the pandemic began.  At its peak on January 3rd, 2022, the S&P 500 was up more than 40% from its closing price on February 19th, 2020 — the peak reading for the index prior to the COVID Crash.  After entering bear market territory in 2022, the S&P is currently only 14% above its pre-COVID high.  In the Russell 1,000 — another large-cap index — 41% of stocks are now trading below their closing price on February 19th, 2020.  20% of stocks in the index are down more than 20%!  Given that two and a half years have passed, we think it’s safe to say that any stock down 20% from pre-COVID levels has been a “pandemic loser.”  At least at this point in time.

Below are stocks with market caps above $15 billion that are down at least 20% from their closing price on 2/19/20.  Names like Boeing (BA), Delta (DAL), Uber (UBER), and Las Vegas Sands (LVS) were some of the initial “lockdown losers” that never really recovered, but other stocks that were initially viewed as “lockdown winners” are also on the list like Netflix (NFLX), Meta (META), Spotify (SPOT), and Zoom Video (ZM).  Go figure.

Boeing (BA) and Intel (INTC) have been two of the biggest losers since pre-COVID with declines of more than 56%.  Other “blue chips” that have been crushed since the pandemic hit include Biogen (BIIB), Citigroup (C), General Electric (GE), Verizon (VZ), 3M (MMM), Square (SQ), Disney (DIS), Adobe (ADBE), and salesforce (CRM).  It’s interesting that there’s representation from nearly every sector of the economy on this list.  The only sector that’s NOT included is Energy, which is crazy since the sector was one of the hardest hit in the early days of COVID as the price of oil even went negative for a day.

Of course, COVID isn’t the reason why all of these large-cap stocks are now down so much since the pandemic began, but the performance numbers are the performance numbers, and there’s no getting around it.  Management at big travel & leisure companies have always wished COVID never happened, but more and more companies in sectors like Tech that thought the pandemic might be a game-changer for them in a positive way are now staring at big 2+ year declines thinking “what the hell just happened.”  Click here to learn more about Bespoke’s premium stock market research service.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

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Wealth

U.S. household wealth suffers record drop in second quarter by Dan Burns (NASDAQ/Reuters)

Rising interest rates and falling asset prices are unwinding many of the huge wealth gains from the pandemic period when soaring prices sent US net worth above $150trn. [Link]

Gulf States, Rich From Oil, Spread Influence With Financial Lifelines by Chelsey Dulaney and Rory Jones (WSJ)

Oil-rich economies are seeing a massive inflow of cash amidst high energy prices. Some are using that cash to support other countries that are reeling under balance of payments stress and natural disaster crises. [Link; paywall]

Electric Vehicles

Tesla Shifts Battery Strategy as It Seeks U.S. Tax Credits by Rebecca Elliott and Mike Colias (WSJ)

The passage of the Inflation Reduction Act earlier this year is already driving companies to re-think their approach to offshoring and supply chain design as the world’s largest EV maker may be switching battery production from Germany to the US. [Link; paywall]

Ford Reveals New EV-Selling Rules to Dealers by Nora Eckert (WSJ)

The Big Blue Oval is rolling out a new approach to selling EVs which will require no-haggle prices. New infrastructure for charging will also be a must. [Link; paywall]

Surgical Science

I Wish I Was a Little Bit Taller by Chris Gayomali (GQ)

Men who want to be a little bit taller are undertaking a dangerous surgery designed to lengthen their legs and add a few inches via broken femurs, titanium rods, and a lot of pain. [Link]

An ACL Tear That Heals Itself? by Aylin Woodward (WSJ)

Imagine your body re-growing its own ACL? A new generation of biologic treatments that create a scaffold for the ligament to grow on is being used to replace the injured tissue. [Link; paywall]

Scarcity & Abundance

Low-Paid Workers Face Worst-Ever Financial Crisis, Study Finds by Alan Jones (Press Association/Bloomberg)

The Living Wage Foundation surveyed low-wage workers and discovered more than half have used a food bank over the past year with almost as many regularly skipping meals. [Link; soft paywall]

From Shortage to Glut: Scotts Miracle-Gro Is Buried in Fertilizer by Thomas Gryta (WSJ)

The huge boom in consumer demand during the pandemic convinced goods producers and importers to ramp up their inventories. Now, that demand isn’t appearing to the same degree that was expected, a glut of inventories and over-production remains. [Link; soft paywall]

Global Food Supply Faces Fresh Turmoil With Rice Set to Climb by Patpicha Tanakasempipat, Pratik Parija, and Mai Ngoc Chau (Bloomberg)

Export controls in India are expected to drive up the price of rice globally. Global production has already been curtailed by weather and the shock of other crop prices soaring earlier this year. [Link; soft paywall]

Ukraine

Ukraine Pulled Off a Masterstroke by Phillips Payson O’Brien (The Atlantic)

The offensive that let Ukraine retake large swathes of Kharkiv Oblast in a dramatic breakout was part of a broader strategic feint which has played out over the entire summer. [Link; soft paywall]

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Have a great weekend!

If you’ve been in a particularly bad mood heading into weekends this year, you’re obviously paying pretty close attention to the markets.  With today’s decline, the S&P 500 is in the familiar position of ending the week with a decline of 1% or more.  If the current declines hold up into the close, it will be the 12th daily drop of 1% or more to end a week this year.  Going back to 1952 when the five trading day week started, there have only been five other years (1974, 2000, 2001, 2002, and 2008) where there were as many or more down 1% Fridays (or last trading day of the week) in a given year.  As you might expect, all five of those years were lousy for the stock market.

While this year is currently tied for having the fourth-highest number of 1%+ down days, the year isn’t even three-quarters done (heaven help us).  After today there are still another 15 weeks left in the year, so there is plenty of time to move up the rankings.  On a percentage basis, the S&P 500 has closed down at least 1% on the last trading day of the week just under a third (32.4%) of the time, and if that pace were to keep up for the remainder of the year, 2022 would easily set the record for the highest frequency of 1% declines to close out the week.  Never have we needed a happy hour more than this year. Click here to learn more about Bespoke’s premium stock market research service.

Earlier this week, a hotter-than-expected CPI print countered the belief that inflation has peaked.  Even with that CPI report, though, there have been a number of other indicators pointing to the opposite.  For example, readings on prices from various PMIs have rolled over and PPI decelerated dramatically.  Some other evidence can be found in Google searches.  Google Trends provides tracking of search interest for a provided search term. Lower readings indicate fewer Google searches for a provided term whereas higher readings indicate elevated search interest with these series indexed to their peak reading. In the charts below, we have adjusted these series for seasonality and re-indexed them so that like the raw data, peak readings are indexed to 100.

Searches for “inflation” surged during the pandemic and reached a record high in August.  So far in September, that reading remains extremely elevated but it has pulled back significantly.  The month isn’t over yet, so time will tell if searches for inflation have in actuality reversed to that degree, but the peaks for related terms have moved even further in the rearview.  For example, searches for “costs”, “high costs”, and “expensive” all surged in the first half of the year reaching a high in the spring.  Since then, these readings have been on the decline, although, searches for “expensive” and “high costs” remain well above levels observed in years prior.

Taking a more granular look at specific consumer expenses shows a bit more nuanced picture.  Rent has been one of, if not the, biggest single driver for CPI recently as we noted in our recap of the latest CPI release. Search interest appears to back that up as searches for the term “rent cost” have exploded higher. Even though it remains well above readings from any other period since the data begins in 2004, that reading has rolled over in the past few months. As for other housing costs, searches for “Utilities Bill” and “Electric Bill” are at and nearing record highs, respectively, after rising sharply in the past year.  Those higher readings are understandable as energy prices have skyrocketed, but gasoline prices are much lower than they were at the start of the summer and search interest has reflected that.  Regardless, higher gas prices makes driving less attractive. In turn, searches for “car pool” are much higher than they were at other times in the pandemic years.

Grocery and food-related searches have also spiked in recent months indicating people are looking into why they are paying more when they head to the store. Again though, similar to rent, these readings have in fact started to roll over in the past few months.

There is only so much the average consumer can do to fight inflation, and the Google Trends data provides some insight into what people are doing to cope with higher costs.  For starters, searches for Electronic Benefits Transfer, or EBT, exploded at the start of the pandemic and have remained extremely elevated relative to pre-pandemic levels.  Current search interest levels are below the highs from the early days of the pandemic, but they have also begun to rise toward the upper end of the range over the past several months.  Meanwhile, searches for “loan” have seen a structural move higher since the pandemic began as well with a particularly sharp increase in recent months.

Searches for “budgeting” used to be much higher in the first decade of the 2000s but as technology increasingly engrained itself into society, those searches appeared to have been replaced by searches for “budgeting apps”. One more specific example is the popular Paypal (PYPL) owned Google Chrome extension Honey which automatically applies coupon/discount codes to online purchases. Over the past year, interest in each of these terms have risen as inflation remains elevated and consumers look for ways to tighten their belts. Click here to learn more about Bespoke’s premium stock market research service.