The S&P 500 Index (SNPINDEX:^GSPC) gained 42.6 points, or almost 1.3%, on Sept. 14. This marks a positive start to the week for investors hopeful that U.S. markets will break a two-week losing streak. After today's gains, the index is still down 5.5% from its peak on Sept 2, following two weeks that finished lower than they started.
Today's move higher was broad, with well over 400 of the stocks in the index closing up today. But by and large, the very best performers were companies that have been some of the biggest losers this year. Today's biggest gainer was Kohl's Corp (NYSE:KSS), up 9.6%, followed by luxury goods maker and retailer Tapestry (NYSE:TPR), up 8.5%; today's move higher left the two hard-hit retailer stocks down 58% and 40% respectively this year, and facing plenty of challenges ahead.
Real estate stocks across the spectrum also featured heavily in today's highest fliers, with both Simon Property Group (NYSE:SPG) and Hilton Worldwide (NYSE:HLT) shares up 5.7%. So far this year, shares of the mall and hotel giant are down 57% and 21%, respectively.
Today's high fliers a collection of 2020's biggest losers
The notable four companies above are a reflection of today's biggest movers. All 10 of today's biggest gainers are still down more than 14% year to date, with only memory giant Micron Technology (NASDAQ:MU) shares down less than 29%. Of the 100 S&P 500 stocks that had the best day today, a whopping 86 are still below their price to start the year.
Tech stocks played a role in today's positive gains for the market. The Technology Select SPDR ETF (NYSEMKT:XLK), which tracks to the tech stocks in the S&P 500, gained 2% today. But the best-performing sector was REITs, or real estate investment trusts, companies that own and manage properties they lease to businesses and individuals.
The Real Estate Sector SPDR (NYSEMKT:XLRE) gained over 2.4% today. But unlike the tech stocks that have done the heavy lifting in 2020, driving indexes back to record levels, the sector, as measured by the ETF, is still down 6% this year. REIT shares are still down more than 13% from the sector high prior to the coronavirus pandemic this spring.
Simon and Hilton (which isn't structured as a REIT but is still representative of the struggling hospitality real estate industry) are excellent examples of companies that continue to struggle with the challenges of operating in the coronavirus pandemic. Their shares are down 55% and 16.4% year to date.
Investing ahead of a post-Covid recovery?
Tech stocks continue to show signs of a return to being in investors' good graces -- unsurprisingly since these are the companies that largely continue to generate strong earnings. But today showed a broad move by investors to buy the sectors that continue to deal with the weight of an ongoing global pandemic. Retailer and apparel makers, airline stocks, hotel owners, and a litany of other struggling industries were featured in today's buying.
Even oil and gas sector stocks by and large had a good day, with the vast majority moving higher. This came after the industry got even more bad news over the weekend when Libya announced it would begin exporting oil again in the days ahead after months of internal conflict.
Oil prices have fallen sharply again, returning to the sub-$40 levels at which most U.S. oil producers can't survive. Today's move up by many of those oil stocks runs counter to the reality many face going forward.
You know the drill (or you should by now)
Such a broad move higher came without any clear economic or financial news to drive stocks higher. Congress remains at an impasse to provide additional economic relief to the millions of Americans who have lost their jobs since March. New unemployment claims remain at record levels, and the new jobs created aren't close to enough to offset the continued losses.
Yet investors acted with optimism today, piling into companies that face a tough path forward.
Today's optimistic buying feels good, but as the past couple of weeks should remind us, it's largely speculative and could reverse course sharply and painfully in 24 hours. Investors clearly want stocks to continue moving higher and for the economy to recover; but the coronavirus pandemic is still an enormous threat, with limited tools to effectively control it at this point.
With Congress at a deadlock, the U.S. presidential campaign battles ramping up with election day less than two months away, and a weak economy creating further uncertainty, investors should be prepared for continued volatility for the foreseeable future. Markets are people, and people hate uncertainty.