The past year was perhaps surprisingly good for the stock market, considering there was a pandemic. The S&P 500 rose about 15 percent, and between Jan. 1 and Dec. 30, 53 of 91 publicly traded companies with a local presence saw their stock prices rise.
“It’s extremely rare — I don’t think it’s happened in my lifetime at least — when you’re sitting in a recession, which we still are, and the markets are up so much,” said J. Bryant Evans, a portfolio manager and investment adviser with Cozad Asset Management.
He said some companies were able to adapt well to the COVID-19 environment, and some not so much.
“A lot of companies in some sectors were able to take advantage of the lockdowns and semi-lockdowns and generate higher revenues and earnings,” Evans said.
He credited efforts by the federal government for putting cash in people’s pockets to save, spend or invest.
The stock market “would not have bounced back so quickly if the investment community felt like the recession would last for two years,” Evans said. “I think the anticipation is really that it’s temporary because it’s a pandemic.”
He said the information technology sector, which is up more than 40 percent according to Fidelity, stood out this year, as more people worked, learned and socialized from home.
“People have really leaned on technology to be able to live in this environment,” he said.
The consumer discretionary sector grew at the next highest rate, up more than 30 percent over the past year. Within that, the internet and direct marketing retail industry was up more than 65 percent.
“Some stores have thrived and others have really struggled,” Evans said. “Really just anyone who’s been able to take advantage of the extra cash that Americans had and the internet. Those two things combined to make for some really healthy” earnings.
On the other end, the energy sector was down more than 35 percent this past year.
“One reason is energy commodities: oil and natural gas have come down in price. Two, there’s much lower demand: Jets aren’t flying and cars aren’t moving as much,” Evans said. “Third, big oil is struggling with the conversion to clean energy. It’s necessary, but it’s costly.”
Looking ahead, Evans expects a positive year for the stock market, but that will depend in large part on COVID-19 and the vaccine.
“The first half, some people are going to be surprised by how much we struggle to get through vaccinations,” he said. “So we might see kind of a slow start to the year, but by the end of the year, I would expect perhaps a single digit gain for the markets.”
He said that could depend somewhat on the new administration, which could seek more spending on infrastructure that could generate business activity, and on future COVID-19 stimulus packages.
“I wish it wasn’t so dependent on the government for what I’m talking about on the rebound,” Evans said. “But it’s not very normal right now.”
Area stocks, 2020
|Name||YTD % Change|
|Arconic (New stock listing as of Apr. 1)||327.0%|
|II-VI Inc. (EpiWorks)||116.1%|
|United Natural Foods||77.1%|
|Deere & Co.||50.5%|
|Sony Corp. (iCyt)||45.9%|
|CNX Resources Corporation||30.3%|
|American Water Works Co.||25.3%|
|Norfolk Southern Corp.||19.9%|
|Canadian National Railway||19.3%|
|Caseys General Stores||12.5%|
|Jeld-Wen Holding, Inc.||10.8%|
|The Kraft Heinz Co.||9.7%|
|Hyster-Yale Materials Handling||1.2%|
|Sinclair Broadcast Group||0.8%|
|Berkshire Hathaway Inc.||0.6%|
|Duke Energy Corp.||0.2%|
|In the Red|
|First Mid Bancshares||-3.9%|
|Universal Health Services||-4.3%|
|Philip Morris International||-4.4%|
|Nexstar Media Group||-5.3%|
|Regions Financial Corp.||-6.8%|
|DTE Energy Co.||-7.0%|
|PNC Financial Services Group||-8.4%|
|Old National Bancorp||-10.0%|
|JP Morgan Chase & Co.||-11.1%|
|CME Group Inc.||-11.8%|
|Deep in the Red|
|Brookfield Property Partners||-18.9%|
|First Busey Corp.||-22.2%|
|First Midwest Bancorp||-31.7%|
|Walgreens Boots Alliance||-33.4%|
|American Airlines Group||-44.5%|
|Wells Fargo & Co.||-44.7%|
|United Continental Holdings||-50.2%|