The big-cap US stocks may not be biggest winners when the virus is under control.
US stocks, as measured by the benchmark S&P 500 index are strong even with the increase C-19 coronavirus cases, as the index contains nearly all of the world’s very largest listed firms, including several global monopolists with vast cash reserves.
Thes big firms with strong balance sheets have been better able to weather the chaos of the virus than most. Some have even used it as an opportunity to secure their dominance, taking up the assets of weakened rivals as 5 of the largest companies have announced a 18 acquisitions between them since the chaos began.
In contrast to the S&P 500, US mid and small-cap indexes, which do not share the S&P 500’s sectoral advantages and are more exposed to the domestic economy have fallen sharply.
That carries counterintuitive implications for relative performance once the US puts the virus in the rear view mirror the S&P 500 might not be the biggest beneficiary, think mid and small cap issues.
Have a healthy day, Keep the Faith!