The election season and recent vaccine developments have spurred some remarkable shifts in market sentiment. For some sectors it has been out with old and in with the new.
Whether due to expectations of a supportive Biden administration or normalized economic conditions, financial, industrial, and “traditional economy” stocks have suddenly taken the market leadership reins from the technology sector.
This has coincided with an abrupt investor rotation from growth to value stocks. Whether this reversal it sustainable remains to be seen, but in the meantime, some unlikely winners have emerged to lead the value charge over the last couple weeks.
The best part? Many are still very inexpensive.
Can The Gap Thrive in the Post-Pandemic Economy?
Shares of The Gap (NYSE:GPS) are already up 33% since the start of November. The catalyst has been the recent wave of encouraging COVID-19 vaccine news.
The one-two punch from Pfizer and Moderna about the effectiveness of their respective vaccines has provided a lift to traditional mall retailers. Except that The Gap is less of a mall retailer these days after announcing the closure of many of its mall-based stores.
Still, the company will have some exposure to shopping malls as well as off-mall locations that are perceived to eventually benefit from improved customer attendance. This helped The Gap’s stock price gap up on November 9th to its highest level since May 2019.
Investors are betting that continued progress on the vaccine front will lead to an environment where consumers regain comfort shopping at malls and outlets. Nearly all Gap, Old Navy, and Banana Republic stores have reopened albeit to modest foot traffic.
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