Quick and decisive action by the Fed to lower interest rates and inject the market with more cash as well as provide a huge stimulus package helped the market bounce back much quicker than anticipated.

Nevertheless, Covid-19 has drastically altered the unique characteristics of the American market.

What has been outstanding about the Covid-19 market crash and subsequent recovery is that many classic defensive sectors such as utilities, cell phone carriers, telecoms, consumer staples and personal products have not acted defensively at all in the face of a lockdown.

In fact, utilities and consumer staples have markedly underperformed the market while a new class of businesses (aka ‘Stay-at-Home stocks’) are not only booming, but promising to sustain the boom, long-term.

Here are 5 Stay-at-Home stocks that are likely to remain strong even after the world moves past the Covid-19 crisis.

 #1 Amazon

       YTD Returns: 62.2%

North America’s largest eCommerce operation, Amazon.com Inc. (NASDAQ:AMZN), has been winning all around, even with the brick-and-mortar stores it competes againstgradually reopening. 

Amazon reported 100,000 job additions to help deal with the Covid-19 boom as stores that deal with non-essential goods were forced to close down. The company’s Prime Video service has also been doing gangbusters during the lockdown after recording a 67% surge in subscribers during the first quarter of 2020.

But it would be disingenuous to credit the health crisis for the company’s success.

Amazon has been the biggest reason behind the retail apocalypse that began long before Covid-19 struck, consistently growing its eCommerce market share thanks to a smooth shopping experience, low prices and an unparalleled delivery network. Meanwhile, the company’s cloud business, AWS, has been its profit engine, contributing more than 70% of its operating income and allowing the company to continue expanding at a rapid clip.

These factors are likely to remain unchanged long after Covid-19 is in the rearview mirror. 

In fact, with older generations that were traditionally more difficult for eCommerce to lure in now fully on board with online shopping, and with convenience tending to be habit-forming, things are likely to return to “normal” in the shopping world once the COVID dust fully settles. 

#2 Zoom

      YTD Returns: 265.3%

The ongoing pandemic has caused a seismic shift in work habits with remote work becoming the new norm. Many businesses are now allowing their employees to telecommute and work from home in a bid to enhance social distancing and minimize chances at infection–even when they don’t have to. 

Videotelephony and online chat services company Zoom Video Communications Inc. (NASDAQ:ZM) has emerged as the biggest winner here with Zoom quickly becoming a household name due to the shift to work-from-home setups as authorities encouraged people to stay at home. As of December 2019, Zoom had ~10 million active users. By April 2020, the company reported that it was recording 300 million daily meeting participants.

And remote work–like online shopping–appears to be here to stay, COVID or not. Companies have realized that it actually works, and eventually they’ll be eyeing the vastly reduced overhead costs of this setup. 

Whereas a computer screen can’t match the physical office when it comes to managerial oversight, mentorship and support and opportunities for social bonding, Covid-19 has been an eye-opener for companies who now realize they can save big money on commercial real estate, which is insanely expensive in places like Silicon Valley and Manhattan. Further, a virtual workplace is pushing companies and workers to focus more on performance rather than merely “clocking hours”.

Indeed, a sizable number of blue-chip companies–including Facebook and Twitter– plan to continue allowing many of their workers to work remotely post Covid-19.

Zoom investors are going to be better off for it far into the future. 

#3 Microsoft

     YTD Returns: 29.3%

Microsoft Corp. (NASDAQ:MSFT)is a true tech giant, and technology companies have generally proven to be surprisingly recession proof. The tech sector’s favorite benchmark, the Technology Select Sector Fund (XLK),is up 16% vs. -0.5% YTD return by the S&P 500.

Microsoft Teams has emerged a favorite among the work-from-home group with theservice recording a robust 70% growth in the number of daily active users (DAU) in April to 75 million. Teams nowis now ready to break out as a standalone product just like Zoom or Slack.

Microsoft, however, has been a great stock to own well before Covid-19.

Increasing cloud traction is a big reason why MSFT shares are up nearly 30% YTD and 176.3% over the past three years. The huge popularity of the tech giant’s Azure cloud-computing business has been helping the company sell its myriad software subscriptions such as Office 365. Recently, Microsoft and Azure scored an important psychological victory overAmazon and AWS after the Pentagon awarded the company the hotly contested $10 billion JEDI cloud contract. 

Microsoft’s CEO Satya Nadella has been credited for steering the company away from the monolithic ‘Window First’ to a ‘Cloud First’ company–and the world has responded.

#4 Netflix 

      YTD Returns: 61.7%

Video streaming giant Netflix Inc. (NASDAQ:NFLX) has been another big beneficiary of the new stay-at-home way of life. Netflix has been recording robust subscriber growth, with the lockdown helping the company post blowout numbers of 10.1M net additions of global streaming subscribers during the second quarter following 15.8M adds in Q1.

Q2 2020 revenues climbed 25% to $6.15B, topping consensus for $6.08B, though net income of $720M, up from a year-ago $271M, and EPS of $1.59 fell short of expectations for $1.83.

Despite the profit miss during the Q2 2020, Netflix is likely to prove prudent long-term investment.

The service is priced well enough, something that has helped the company continue growing even in poor economic cycles and helped NFLX stocks surge 433% over the past five years.

Netflix still has been finding many opportunities of growth outside its core US market with an uncanny ability to produce original content and multiple multiseason series for a wide variety of demographics that keeps people of all walks of life glued to their screens. With about 182 million worldwide subscribers, the NFLX momentum is more than sustainable.

#5 Nvidia

      YTD Returns: 72.3%

Video game sales have really surged during the lockdown. According to NPD,sales of gaming hardware, software and accessories in the US jumped 35% to $1.6 billion in the month of March 2020 alone.

But Nvidia was winning the graphic processor chip battle long before that.

Over the past couple of years, Nvidia Corp. (NASDAQ:NVDA) has emerged as the true king of graphics processors, managing to consistently post strong top- and bottom-line growth and surpass expectations. 

Further,Nvidia is at the intersection of, and perfectly positioned to benefit from, robust growth by many cutting-edge technologies including artificial intelligence(AI), machine learning, self-driving cars, crypto-mining efforts and other future tech applications. These fields are not likely to be dead-end roads after the coronavirus pandemic passes, as evidenced by the amazing 1,970% surge by NVDA over the past five years.

Nvidia’s Chip rival Advanced Micro Devices Inc. (NASDAQ:AMD) gets the runner-up nod here as it continues to steal datacenter market share from CPU giant Intel (NASDAQ:INTC). AMD shares are up an astounding 2,840% over the past five years.

The post 5 Stay-at-Home Stocks That Will Sustain Post-COVID Growth appeared first on Global Investment Daily.

While the energy industry is being forced to completely reinvent itself, with renewables coming out on top and diversification the new name of the game, and while travel and tourism segments aren’t likely to recover anytime soon, what happens if there’s yet another lockdown?

The investment thesis has already changed irreversibly, and 5 sectors are soaring. In the event of another lockdown, those same sectors will solidify their victories, while some sub-sectors that were still behind will catch up for the second rally.  

#1 Biopharma and The COVID Gold Mine

For the foreseeable future, the biopharma sector will be completely consumed by a high-stakes game over the development of treatments and a vaccine for COVID-19. It’s a no-holds-barred game that is geopolitical at its most vicious level. 

Indeed, stocks of companies in the race to develop Covid-19 vaccines or drugs soared over 470% from January 2020 to July 2020. 

Source: Graffiti

A handful of biopharma stocks have soared beyond imagination in 2020, including Vaxart Inc. (NASDAQ:VXRT), which enjoyed a boost of over 2,000% in the first and second quarters of 2020.

Sorrento Therapeutics (NASDAQ:SRNE) saw YTD returns from January-July of nearly 140%, with the biggest boost coming after an in vitro assay for its COVIDTRAP vaccine was able to “completely inhibit” the ability of the coronavirus to infect cell cultures at low concentrations.

And it’s not just about a COVID vaccine. The pandemic has given telemedicine a decisive boost as the “new normal” in healthcare. A case in point is Teladoc Health (NYSE:TDOC), a telemedicine and virtual health care company, which managed to rack up gains of over 173% between January and July 2020. 

#2 Work From Home–Forever

One of the biggest lifestyle shifts forced by the pandemic has been the move to remote work. Many businesses are now allowing their employees to telecommute and work from home in a bid to enhance social distancing and minimize chances at infection.

Videotelephony and online chat services company Zoom Video Communications Inc. (NASDAQ:ZM) has emerged as the biggest winner here with its stock surging over 300% in the first and second quarters of 2020. 

Now, Zoom is a household name. In December 2019, it had ~10 million active users. By April 2020, the company reported 300 million daily meeting participants.

It’s not without competitors because this is now a high-demand segment. 

By April 2020, networking company Cisco Inc. (NASDAQ:CSCO) had 300 million Webex users, while Alphabet Inc.’s (NASDAQ:GOOG) Google Meet was adding 3 million users per day and boasted over 100 million by July 2020. Not to be left out of the game, Microsoft Inc. (NASDAQ:MSFT) said in April 2020 that its Teams service recorded robust 70% growth in the number of daily active users (DAU) in a single month to 75 million.

However, unlike Zoom, these are just auxiliary businesses for these tech giants and might therefore not readily drive stock performance.

Other remote communication stocks set to rise even further include business messaging platform Slack Technologies (NYSE:WORK), which saw YTD (January-July 2020) gains of over 50%. 

#3 Streaming: The Final Push for Entertainment

With social distancing in effect, people who get their daily dopamine fix through entertainment have to mostly do at home. As a result, streaming services are booming and will continue to do so.

Netflix Inc. (NASDAQ:NFLX) is the indisputable leader in the space, gaining nearly 70% in the first two quarters of 2020, with analysts exceedingly bullish on the future. Streaming platform Roku Inc.(NASDAQ:ROKU) is also expected to continue tearing up YTD figures going forward in the “new normal”, and Amazon Inc.’s (NASDAQ:AMZN) Prime Video service is set for blockbuster performance, having seen a nearly 70% surge in subscribers for the first half of 2020. 

Video gaming companies are also doing roaring business with Americans spending more time on their consoles. Investors are all over Activision Blizzard (NASDAQ:ATVI), the maker of massively popular video games such as Call of Duty, Electronic Arts (NASDAQ:EA),Take-Two Interactive Software(NASDAQ:TTWO) and Zynga Inc. (NASDAQ:ZNGA).

Meanwhile, with gyms featuring as a dangerous venue for the spread of disease, makers of home exercise equipment Peloton Interactive (NASDAQ:PTON) and Nautilus Inc. (NYSE:NLS) have surged and will be direct beneficiaries of another pandemic lockdown. 

#4 eCommerce: Now It’s a Habit

Online shopping hasn’t just soared in the pandemic—it’s breached unthinkable new thresholds. Even without another lockdown it’s set to continue making massive gains because shoppers get used to the convenience. 

But more than that, a new age group—45 and older—has latched onto the practice where they resisted prior to the pandemic. That fact adds millions of new ecommerce participants who very likely won’t give up the habit even once we’re COVID-free.  

Again, Amazon Inc.—the ironman of ecommerce even before the pandemic—saw its stock soar over 70% in the first half of 2020. Other giants to keep an eye on include eBay Inc. (NASDAQ:EBAY) and online payment darling PayPal Holdings (NASDAQ:PYPL), is up 64.93% over the timeframe—both of which are expected to continue to rival Amazon in terms of stock boosts. In the event of another lockdown, these stocks will soar even further, but they may continue on their upward trend regardless.

#5 Information Technology: The Backbone of It All

Always the quintessential all-weather sector play, IT is set to continue to lead all 11 sectors of the U.S. stock market, with FAANG stocks—Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon, Netflix and Alphabet–seriously sharpening their incisors. 

But looking slightly below the obvious surface here, a pandemic lockdown won’t just push Apple devices sales for stay-at-home work and entertainment, it will push sales of software and hardware. 

Chip-manufacturers such as Nvidia Corp (NASDAQ:NVDA), Micron Technology (NASDAQ:MU) and Advanced Micro Devices (NASDAQ:AMD) will soar along with them—even if they’ve been playing catchup so far. 

Chips are where investors can get in on the rally if they missed it earlier in 2020 because they’re part of a broader trend. 

As Gina Sanchez, CEO of Chantico Global told CNBC recently, “The trend towards remote working, the revamping and revisiting of business continuity plans, the push towards 5G, all of that has played into the hands of semis stocks.”

The post Watch These 5 Sectors If America Is Locked Down Again appeared first on Global Investment Daily.