The Russell 1000 Growth Index, a basket of US growth stocks, was down 5.6% in September. In comparison, the Russell 1000 Value Index, a basket of US value stocks, was down 3.4%
The unexpected beneficiary in the pandemic: cannabis. Yes, the substance that’s still illegal in 41 states made it onto the shortlist of essential businesses allowed to stay open. In the midst of record sales, cannabis CEOs are naming the current market as “Cannabis 2.0”, the maturity and recovery of the industry.
Investors rushed into cannabis stocks in 2018 with the hopes of earning fast and easy returns. Stock prices crashed in 2019 as companies failed to meet sales growth expectations or generate a profit. These companies had poor cost controls and lacked access to traditional banking services for loans. The ETFMG Alternative Harvest ETF ($MJ), a cannabis-focused ETF, lost over half its value after hitting its peak in 2018.
Investors woke up on Monday morning to a double whammy that sent bank shares sharply lower: Risk of a second virus lockdown and leaked documents showing banks’ participation in criminal transactions.
An investigation by BuzzFeed and the International Consortium of Investigative Journalists showed banks facilitating more than $2t in transactions that were potentially involved in criminal activity.
This is the end… of oil as we know it. Oil execs may finally be waking up to their worst nightmare — a world with a lot less oil.
On Sept. 14, a report by Beyond Petroleum ($BP), one of the largest oil & gas companies in the world, warned of a peak in oil demand. Here, BP presented 3 scenarios where oil consumption would increase 10%, fall 50% or fall 80% by 2050. Even in the most optimistic scenario, oil demand remains relatively flat.
Both Home Depot ($HD) and Lowe’s ($LOW) brought the house down in their second-quarter earnings report. On Aug 18., Home Depot reported earnings of $4.02 (vs $3.71 expected) and revenue growth of 23%. On Aug. 19, Lowe’s reported a strong sales growth of 30%, higher gross margins and earnings of $3.74/share that easily beat analyst expectations of $2.92/share.
Little? Big? Little? Big? Which one will perform better? We will find out.
US small-cap stocks have taken a bigger hit during the pandemic than large-cap stocks.