Hopes of returning to "normal" have been pushing the market higher lately.
In fact, we just experienced one of the single-greatest monthly rallies in the stock market's history. The S&P 500 Index was up 10.9% for November... the tech-heavy Nasdaq was up 11.9%... and the Dow Jones Industrial Average soared 12.1%.
There's been a lot to be thankful for over the past few weeks. The biggest source of good news is, of course, the COVID-19 vaccine progress.
Experts say the general public could have access to a coronavirus vaccine as soon as April. That's well ahead of expectations.
I'm personally skeptical about whether or not a vaccine rollout will go as smoothly as many think... But that's not what I'm here to discuss today.
Today, I want to talk about the concept of returning to normal. Even with a vaccine, it's possible we won't see normal in the office ever again...
Right now, thousands of workers in the U.S. are at home. They're on their couches or in their home offices trying to be as productive as if they were in the office. For most companies, it's working.
Here at Stansberry Research, we've been able to continue churning out research and investment ideas without too much trouble while at home.
But starting around Labor Day, we saw many companies starting to bring their employees back to the office.
According to Kastle Systems, a security firm that monitors access-card swipes in a few thousand office buildings in 10 of the largest U.S. cities, only 14.9% of employees were in the office in early April... And that mostly consisted of maintenance crews and a handful of essential workers.
By September, a quarter of employees were back in the office. But with the recent surge in positive COVID-19 cases, workers are more hesitant about leaving the house. That rate has recently dropped to 17%...
Going forward, businesses are going to be very cautious about bringing their employees back to the office. Many companies have already extended their work-from-home policies well into next year.
This work-from-home frenzy is also causing folks to leave big cities. We've recently seen a huge migration from major urban areas. People don't want to continue paying sky-high city costs when they don't have to commute to work every day...
According to data firm CoStar Group, vacancy rates in downtown areas are steadily increasing. Rental apartment vacancy rates in downtown areas late last year were around 7%. They're now up above 9%.
As more Americans head for rural areas, many restaurants and other shops in big cities are barely hanging on... or have already closed their doors for good.
So while things in the economy may get closer to normal next year, there are still some things that may never go back to normal.
I think that the shift from office life to working from home is here to stay for many companies and employees. While many executives would love for their employees to be in the office, having face-to-face conversations and collaborating more easily, some are learning that working from home can be just as productive.
This is a trend that will last years. And that bodes well for the future of technology stocks.
While things will inch closer to normal next year and into 2022, some aspects of our lives have changed for good. The importance of innovation will only continue.
Good investing,
Dr. David Eifrig
Editor's note: No one could have predicted that a global pandemic would change everything in 2020. But when it came to the markets, our colleague Greg Diamond knew a crash was imminent... and even called the bottom down to the exact week, thanks to a little-known trading secret. Now, he says another turning point is on the way, beginning with a huge move on December 23... Learn the details here.
Further Reading
Even with the promise of a vaccine against COVID-19, employers will still want to save costs by letting people work from home. And that means the "At-Home Revolution" isn't going away any time soon... Read more here: The 'At-Home Revolution' Is Far From Over.
"Demand for this type of business was growing even before the pandemic struck," Corey McLaughlin writes. Tech companies have been mostly unimpeded by the coronavirus. And with lockdowns still in effect, demand for this type of technology is only growing... Get the full story here: Software Is (Still) Eating the World.
Folks are avoiding the office and buying more online than ever. But that hasn't stopped this payment-processing juggernaut...
A TOOLMAKER WITH STEADY SALES ISN'T SEXY... BUT IT'S RELIABLE
Today's chart highlights a "boring" business that's thriving...
Longtime readers know that although investors get excited about the latest "fads," and breakthrough technologies, you don't always need to have a risky business model to succeed. Some of the most reliable gains come from businesses that you'd consider just plain-old boring. Today's company is one example...
Snap-on (SNA) is a $10 billion toolmaker. It employs around 12,200 people across the globe. And its annual sales have kept rising for five of the last six years. Even as other businesses are struggling in the face of the COVID-19 pandemic, this boring business is showing strength... In its third-quarter results, the company reported that net sales increased to $941.6 million, up 4.4% year over year. Plus, its net earnings per share rose to $3.28 per diluted share, compared with $2.96 last year.
In the chart, you can see that SNA dropped in March with the rest of the market, but has made a strong recovery. It's up around 90% from its lows, recently hitting a new multiyear high. It may not be sexy or exciting... but selling tools is paying off today.
