After a three-day uninterrupted run higher, it appears that stock markets have decided to end this week on a down note. With just two hours to go in the trading week, the Nasdaq and S&P 500 indexes were both lower by about 2%, with some individual stocks faring much worse -- but at least one faring much better.
As of 1:55 p.m. EDT on Friday, we're seeing the stock of Cracker Barrel Old Country Store (NASDAQ:CBRL) down 14%, and shares of fellow restaurateur Shake Shack (NYSE:SHAK) down 11.1%. On the other hand, Zoom Video Communications (NASDAQ:ZM) is enjoying a 7.4% surge.
None of these three stocks has reported any specific news that might affect its share price today. There are macroeconomic factors afoot, of course. For one thing, on Thursday the U.S. Labor Department reported our biggest-ever one-week increase in unemployment: 3.3 million new jobless claims. And today, Johns Hopkins University reported that the U.S. now officially has the most confirmed cases of COVID-19 of any country, at more than 86,000.
If you ask me, though, what's really driving Cracker Barrel and Shake Shack lower today is a comment made by U.S. Surgeon General Jerome Adams this morning on Good Morning America. According to Adams, "some places [in the U.S.] haven't hit their peak yet" for COVID-19 infections. In fact, he said, some parts of the country could still be fighting off the effects of this virus come "Easter, Memorial Day, or [even] Labor Day."
Labor Day is Sept. 7, nearly six months away. That's a long time to ask restaurants to wait to get their customers back. Even if Adams wasn't talking about the whole country being on lockdown until Labor Day, just hearing that this situation might drag out for months in certain areas has to be a drag on restaurant stocks.
Conversely, though, an added six months of Americans (even just some) continuing to work from home could benefit a company like Zoom. No one wants to see this pandemic force us into a recession, but the longer this situation drags on, the more time that telecommuting and videoconferencing from home will have to become an accepted part of work life in the U.S. The longer that social distancing is encouraged, the more familiar that employees will become with Zoom's service. And the more likely it becomes that they will demand that their companies keep it available as a work-from-home option even after this present crisis passes.
This is the real reason that restaurant stocks like Cracker Barrel and Shake Shack are down today, and why Zoom Video Communications stock is up.