This certainly hasn't been a great week to own tech stocks.
Since trading closed for the week last Friday, and through 12:40 p.m. EDT today, cybersecurity specialist CrowdStrike Holdings (CRWD -3.12%) is down 8%, videoconferencing company Zoom Video Communications (ZM 0.62%) has fallen 8.7%, and the confusingly similarly named software-as-a-service company ZoomInfo Technologies (ZI -1.81%) has dropped 13%. These totals include today's declines of 2.4%, 4.7%, and 6.7%, respectively.
Arguably even worse than the declines themselves, for the investors who own these normally uber-hot stocks, is that there appears to be no bad news specifically about them that's driving the declines.
While that may be true, the fact is that there does appear to be a reason for investors suddenly getting nervous about the stock market in general -- and high-flying tech stocks in particular -- and just like earlier this year, its name is COVID-19.
From the latest data out of Johns Hopkins University, it's becoming clear that the spread of the novel coronavirus is rather rapidly slipping out of control. In the U.S. alone, we're quickly approaching 9 million total infections, with a current death toll of 229,000. India is just behind with more than 8 million infected, and infection rates are rising in Germany, France, and Spain -- the last two of which have already passed the 1 million mark.
And things may get even worse before they get better. Fall has arrived and winter's on its way, seasons in which people will stay mostly indoors, where the novel coronavirus has proven itself more easily spread. Meanwhile, the influential medical news site STAT has just warned that "the ambitious drive to produce Covid-19 vaccine at warp speed seems to be running up against reality."
A combination of slower-than-expected clinical trial progress and Food and Drug Administration worries about approving a vaccine before it's been proven both effective and safe, warns STAT, means that a vaccine may not arrive this year after all. Reinforcing this view, Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, says about a vaccine approval, "Could be January, could be later. We don't know." And even more optimistic forecasters say it could be March or April before we're "able to vaccinate any American who desires a vaccination."
Long story short, the pandemic isn't over, and the recession may only have just begun.