A funny thing happened on the way to the stock market withdraw.
Stay-at-home stocks benefit the most from Covid-19 and subsequent lockdowns, like Etsy, DoorDash, Launch and DocuSign, are the worst performers this week. That’s the opposite reaction one might expect the new Covid omicron variant, which The World Health Organization said poses a “very high” global risk, going around the world.
The sharp sell-off shows investors are betting that, no matter what happens to omicrons, the US shutdown has boosted streaming TV and food delivery services while forcing everyone to collaborate. remotely for work and continuous video chat with friends and family members.
Pandemic lover Zoom’s shares fell 16.5% for the week, hitting a 52-week low on December 3 of $177.12 a share, down 69% from a record high in October. October 2020. Shares of online marketplace Etsy, which have become a haven for mask shoppers early in the pandemic, are down 20.6% for the week, while food delivery service DoorDash is down 16%. , Roku down 13%, Shopify down 10.5% and Netflix down 9.5%.
Meanwhile, electronic signature software maker DocuSign, which tripled in value last year, 42% increase on Friday after the company’s weak fourth-quarter guidance showed “pandemics stopped much faster than expected,” JPMorgan analyst Sterling Auty wrote in a note to clients.
There’s a lot of trouble getting around in the tech sector. The Nasdaq Composite plummeted more than 1.9% on Friday, sending it down 2.6% for the week for its fifth worst week of the year. A disappointing jobs report over the weekend coupled with concerns about omicrons led to a downturn on Friday.
But some of the tech’s blue chip names have withstood the pressure. Apple, HP and Cisco All rose for the week, as investors looking to mask market volatility shifted away from high-risk, multi-cap stocks and into cash-generating companies that pay dividends. ie.
Earlier in the week, Federal Reserve Chairman Jerome Powell indicated that the central bank is concerned about escalating inflationary pressures so it may begin to reduce its bond purchases to prop up the economy.
Following Powell’s remarks on Tuesday, Apple is Only technology stocks increase in price.
“There’s a quality flight with these companies that you know will weather the storm, not go bankrupt, not get into financial trouble,” Needham analyst Laura Martin told CNBC.
Apple fell on Friday but is still up more than 3% for the week. HP shares are up about 8% this week and hit an all-time high on Friday. HP CEO Enrique Lores said last week that the company expects to see strong demand for its personal computers in the “near future” across its segments.
Cisco and Broadcom has increased by more than 2% this week and Intel and Qualcomm less than 1% increase.
But for a large range of technologies, the market is a sea of red. Facebook, AMD, Adobe and Tesla All are down more than 6% for the week, while the cloud software provider Asana, which was the best-performing tech stock of the year, fell 36.8% and Bill.com, a company that performed better recently, was down 21%.
Sales force contributed to cloud concerns on Tuesday, when the company released forecast for the fourth quarter. Shares are down 9% this week.
Byron Deeter, a partner at Bessemer Venture Partners who invests in cloud software, said in an interview with CNBC’s “TechCheck” on Friday: “It’s a pretty wild thing. “You can look at four causes. You can look at omicrons. You can look at inflation. You can look at interest rates. And you can look at profit taking.”
However, Deeter is quick to point out to skeptics what happened last year.
“As a reminder, working from home is really good for cloud stocks,” Deeter said. Inflation could be a cause for concern, he said, because “the downstream link with inflation can certainly cause value mobility in stocks and cash-generating stocks over time.” “
