Stay-at-home stocks came under pressure on Friday after investors seemed to focus on an optimistic forecast for a potential end to the coronavirus pandemic.
Following Pfizer and BioNTech's report earlier in the week that their coronavirus vaccine candidate could be more than 90% effective at preventing COVID-19, economists at investment bank UBS made the startling prediction that infections in the U.S. could fall close to zero in as little as six months.
Though it would be wonderful if the COVID-19 crisis came to an end as soon as UBS is predicting, multiple signs suggest otherwise. More than 150,000 people tested positive for the dangerous disease on Thursday alone. Surging case counts are prompting governors in multiple states to impose new lockdowns to slow the spread of COVID-19.
Moreover, even if Pfizer and BioNTech receive regulatory approval for their experimental vaccine, doses of the drug may not be widely available until well into next year. Thus, it seems unlikely that infection rates could approach zero by the end of the second quarter of 2021.
Zoom, DocuSign, and Peloton have seen their sales soar during the pandemic, as demand for videoconferencing software, e-signature solutions, and home-based fitness equipment surged. Yet this demand is unlikely to just disappear once COVID-19 is contained. Trends toward working (and working out) from home will continue well after the coronavirus crisis ends, particularly now that millions of people have seen just how effective they can be in these areas.
Today's sell-off in these stay-at-home leaders, therefore, seems overdone.