Summary: When MRP added Long Clicks vs Bricks to its list of themes in April, our rationale was that COVID-19 would tilt consumers more deeply towards ecommerce and that the impact on shopping habits would be long-lasting. The data we are seeing reinforces our conviction that the divergence between the clicks and the bricks has accelerating, compelling us to reaffirm the theme.

Related ETF: ProShares Long Online/Short Stores ETF (CLIX)

Extended COVID-19 Disruption

This long weekend, the U.S. set records for daily new coronavirus cases, with the recent spike outpacing daily infections in April when public officials thought the outbreak was hitting its peak. On Friday, the nation reported more than 52,000 new cases, the third day in a row the daily national number has exceeded 50,000.

Unlike in April, when the virus rocked Washington state and the northeast, new outbreak surges nowadays are mostly across the South and West of the United States. Florida and Texas, for example, hit a record number of daily infections on Saturday, respectively reporting 11,445 and 8,258 new cases. Florida also reported Saturday that 14.1% of those tested for the virus were positive while Texas reported a positive rate of 13.1%, both well above the 5% threshold that the World Health Organization advises as a safe level for governments to reopen business.

As of mid-June, stay-at-home orders had been lifted in all states that had imposed one, and every major service sector had reopened across the country, including retail stores, restaurants and bars, personal care, and entertainment venues such as theaters and museums.

But now, faced with rising case counts, a growing number of states are backtracking on their plans to reopen completely. Several are even re-imposing restrictions they had lifted earlier. For example, Michigan, Florida, Texas, California, Colorado and Arizona are closing thousands of bars again, while some restaurants that reopened are also shutting down as they receive news of employees or customers testing positive. Meanwhile, the return of indoor dining has been indefinitely postponed in places like New Jersey and New York City.

These reversals — coupled with the fact that many businesses still operate under restrictions such as allowing fewer customers, requiring the use of masks, and enforcing social distancing — are likely to compel an already anxious public to limit their forays into brick and mortar establishments…

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