Wednesday's Market Minute: Turns Out The Entire Nasdaq Is A Stay-At-Home Trade

One of the fascinating financial things during the quarantine period has been watching the stock market’s ability to specifically identify quarantine winners and losers. That’s turned into an entire thematic stay-at-home trade, of which Zoom Video Communications, Inc. ZM is the darling child. There’s even an ETF coming! Teleconferencing, telehealth, online retailers, streaming services, pet supply providers, and the few remaining physical grocers.

But wait, there’s more. Cloud companies enabling work from home, data-center REITs behind cloud power, chipmakers that are the backbone of the data centers – wait, what the heck? Turns out the ENTIRE NASDAQ is a stay-at-home trade?! What began as outlier strength morphed Tuesday into an all-out rally that sent Amazon.com, Inc. AMZN and Netflix, Inc. NFLX to new highs, but revived classic FOMO trades of yesteryear from Roku, Inc. ROKU to Virgin Galactic Holdings, Inc. SPCE. Has the market completely lost its marbles?

There have been two major forces at play in supporting the powerful move in stocks off the low:

1. The possibility that the fastest decline in history followed almost immediately by the biggest Federal rescue package in history may be enough to net out something close to neutral or even positive if the virus shutdown lifts faster than originally expected.
2. Tech is the future, and our digital future just got pushed forward.

Some of these quarantine trades will likely fade when it’s over, but many are just the same long-term trends that people have been getting bulled up about for years. It’s why the Nasdaq has dominated the S&P since the highs, and why economic collapse may not be as severe as the worst warnings when such an important part of the global economy is still working.