On a Monday when most stocks appear to be in the red, three -- apparently unrelated -- stocks are all looking redder than most: The Coca-Cola Company (NYSE:KO), Marriott International (NASDAQ:MAR), and Harley-Davidson (NYSE:HOG).
As of 2:35 p.m. EDT, these three stocks are down 4.7%, 5.5%, and 9.5%, respectively. The question is: Why?
First and foremost, it's worth pointing out that none of these three stocks has had any news of particular note to report today, whether originating from corporate press departments, or from analysts covering the companies. No earnings reports, no downgrades, no cuts to price targets have been announced for any of Coke, Marriott, or Harley.
What's more, at first glance, the three stocks don't even seem to have much in common. One makes a sugary syrup that's popular all around the world, the other owns a well-respected global hotel brand, and the third is probably the best-known brand of motorcycles in the world.
But could that actually be what's dragging these three stocks down? Their global business networks, and their resulting exposure to the global economy? After all, the latest data on the global coronavirus pandemic is pretty dire. According to Johns Hopkins University, total confirmed COVID-19 infections worldwide are approaching 1.9 million, and total deaths have passed 118,000 -- a mortality rate exceeding 6%.
On the other hand, new instances of COVID-19 infection just dropped for the second day running -- both in the U.S., and worldwide -- after climbing for five straight days previously. This, it would seem, is good news that could balance out the bad absolute numbers, and that potentially suggests we could see the virus beginning to lose steam.
Of course, there's also possibly a third factor at work here.
Two months into the coronavirus pandemic, we're now fast approaching the start of earnings season in the U.S. On April 21, Coca-Cola will be the first of the three companies named above to report its quarterly earnings for the quarter in which coronavirus reached "pandemic" status. A week later, Harley-Davidson will release its numbers, and a couple of weeks after that, on May 8, it will be Marriott's turn.
The fast-approaching potential for these three companies to report not just sales and earnings declines (or even losses), but to promise more of the same for perhaps the duration of the recession, may be starting to rattle investors' nerves. No one knows just yet how bad the news might be -- but investors may be beginning to think it's best to sell now, and not be caught holding these stocks on earnings day.