Tuesday's 0.5% S&P 500 loss certainly did not tell the whole story. It was actually a decent day for smaller names as the Russell 2000 (+1.26%) and Russell Microcap (+1.39%), and for many names in some beaten-down sectors. Despite that small bright spot, many remain in depression-like states.
Restaurant land benefited from what can best be termed as "light at the end of the tunnel" sentiment, as several states began taking steps to loosen at least some restrictions. A short list of sector beneficiaries included Kura Sushi (KRUS) (+13.5%), Del Taco (TACO) (+12.2%), Dine Brands Global (DIN) (+11.6%), Brinker (EAT) (+11.6%), Chuy's (CHUY) (+8.6%), Bloomin' Brands (BLMN) (+8.2%), and Dave & Buster's (PLAY) (+8.2%). Despite yesterday's performance this is a group that is still down 46% on average year-to-date.
The road back won't be easy, either. At least a couple of months revenue has been lost, employees displaced, spoilage costs incurred, and a potentially significant ramp-up will be required to reopen. Even then, full capacity is unlikely for quite some time, due to regulation. I also wonder whether, at least for a while, the chains will be avoided in favor of supporting the smaller mom and pop establishments. In addition, it is yet unclear how consumers will react to being sprung from their lockdowns.
I'm looking forward to being able to go back to a restaurant, but every consumer is different, influenced by their own health, the experience of others they know in this pandemic, and their own predispositions about the quarantine, its necessity, and effectiveness. I think it has gone too far, with unintended consequences that will be tallied later. Keeping us sequestered like veal has had some significant downsides.
Small retailers also enjoyed yesterday's action. The likes of Ascena (ASNA) (+31%), Chico's (CHS) (+27%), G-III Apparel (GIII) (+13%), Vera Bradley (VRA) (+11.3%), Cato (CATO) (+7.2%), and Fossil (FOSL) (+4.2%) were on the upswing. However, for perspective, keep in mind that this group is still down more than 57% year-to-date.
Some larger retailers including The Gap (GPS) (+10.5%), L Brands (LB) (+9.4%), and Kohl's (KSS) (+6.7%) also shined. This group is down 46% year to date. It is still very eerie picking up curbside takeout at our favorite Italian restaurant, located in a plaza where Kohl's is the anchor as the emptiness of the parking lot is downright disturbing.
It was also nice to see Harley-Davidson (HOG) (+15%) on the upswing. Despite yesterday's action, HOG is still down 40% so far in 2020.
Here's hoping for a return to "normalcy," whatever that means.