Peloton, Zoom, More Stay-At-Home Stocks Hold Up During Market Downturn

The SPDR S&P 500 ETF Trust SPY fell to its lowest levels in nearly two months Monday, but some popular work-from-home stocks were bucking the trend.

Stocks dropped sharply on Monday as the September sell-off continued. The market weakness has primarily been driven by concerns over the potential for another wave of the coronavirus pandemic and the lack of progress in Washington on producing another economic stimulus bill.

In the U.K., officials are considering another two-week economic lockdown as coronavirus cases surge toward 50,000 cases per day.

Stimulus Uncertainty: In Washington, D.C., the death of Supreme Court Justice Ruth Bader Ginsburg likely won’t help bipartisan negotiations between Democrats and Republicans on another stimulus bill ahead of the November election.

It’s now been six months since the passage of the CARES Act, and lawmakers have made little progress in negotiations for a second bill since the original one expired in July.

Investors seem to be growing increasingly convinced that a second major stimulus bill is unlikely to be passed until after the election. This week, Federal Reserve Chairman Jerome Powell will be discussing the CARES Act before both houses of Congress.

Mizuho chief economist Steven Ricchiuto said Monday that Powell’s tone in his recent post-meeting press conference was a “very somber” one regarding the longer-term outlook for the U.S. economy.

“We believe the Fed’s caution is understandable, especially because the risk of being overly accommodative for too long pales in comparison to that of allowing deflation to take hold as it appears to have done in Europe,” Ricciuto said in a research note Monday.

Stay-At-Home Stocks Steady: The one-two punch of more economic shutdowns and no stimulus weighed heavily on stock prices Monday, but some of the same stocks that thrived during the first half of 2020 are bucking the trend.

Here’s a look at how some popular stay-at-home stocks ended Monday's trading session: 

• Zoom Video Communications Inc ZM was up 6.78%. 
• Slack Technologies Inc WORK was up 4.55%.
• Twilio Inc TWLO was up 5.72%.
• Peloton Interactive Inc PTON was up 5.69%.
• Spotify Technology SA SPOT was up 2.33%.
• Zscaler Inc ZS was up 4.52%.
• Docusign Inc DOCU was up 5.21%.
• Etsy Inc ETSY was up 3.81%.
• Trade Desk Inc TTD was up 5.92%.
• Square Inc SQ was up 4.21%.
• Netflix Inc NFLX was up 3.7%.
• Cloudflare Inc NET was up 5.01%.

Benzinga’s Take: The coronavirus pandemic, the election and the lack of clarity on additional stimulus funds are combining to set investors up for what could be the most unpredictable fourth quarter in recent memory.

When investors are facing uncertainty, they tend to take money off the table, which may be what they are doing so far in September when considering how hard the market rallied off its March lows up to this point.

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Photo courtesy of Peloton.