Why Alphabet, Facebook, and Twitter Stocks Soared Monday

- Advertisement -

What happened

- Advertisement -
- Advertisement -
- Advertisement -

After saying last week that we will face a “very, very painful” two weeks of mounting COVID-19 infections and deaths, President Trump now says that we are approaching the “light at the end of the tunnel.”

Both statements may be correct. According to the latest data from Johns Hopkins University, total global cases of coronavirus infection jumped from 1.2 million to 1.3 million Sunday to Monday. At the same time, the rate at which new cases accrued dropped significantly, with about 17,000 fewer new cases recorded by end of day Monday than we saw on Sunday, including 9,000 new cases in the U.S.

And it’s that latter data point that investors focused on today.

So what

By close of trading Monday, shares of tech stock giant Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) were up 8.1%, while Twitter (NYSE: TWTR) notched an 8% gain, and Facebook (NASDAQ: FB) closed up 7.4%.

Viewed from one perspective, these price movements might look a bit strange. The fact that tens of millions of Americans have spent the better part of the past month sitting at home, socially distanced and effectively alone with their devices in quarantine, certainly helped to boost the amount of time people spent posting on social media and running internet searches on Google. On the other hand, all that posting and scrolling doesn’t help the internet companies much if they cannot sell advertising to the folks doing the viewing and scrolling — and as TheFly.com has reported, “across the online advertising space … advertiser willingness to deploy ad dollars” has declined in the face of coronavirus.

With almost no one spending money on discretionary goods (we’ve all been too busy stocking up on pasta and toilet paper), there’s been little reason to advertise to attract those dollars not being spent. And that cannot have been good for the businesses of Alphabet, Twitter, and Facebook.

Now what

Now, however we’re starting to see “glimmers of progress” in the fight against coronavirus, says Vice President Pence. The light at the end of the tunnel is at least visible, even if we’re not really quite certain how long the tunnel might still be.

In short, even in the middle of what might be the worst week for coronavirus numbers yet, there’s hope that things will eventually get better, and get back to normal. People might start shopping again, advertisers might resume advertising — and Alphabet, Twitter, and Facebook might have more ads to sell.

Even if there are fewer people seeing those ads post-coronavirus, that would be a good thing.

10 stocks we like better than Alphabet (A shares)
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Alphabet (A shares) wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Ryanair Afrikaans test: Airline stands by South African language quizon June 9, 2022 at 8:36 am

Many South Africans are outraged about the test in Afrikaans, because of its links to apartheid.Image source, ReutersIrish budget airline Ryanair says it is...

Mourinho says Spurs failed ‘at the basics of life’ as Lloris calls Europa League exit ‘a disgrace’on March 19, 2021 at 12:13 am

Jose Mourinho apologises to Tottenham fans and says his players failed "at the basics of life" as they are knocked out of the Europa...

Dressing For a More Professional Workplace

Dressing For a More Professional WorkplaceBusiness casual is an ambiguous term, usually understood as casual workplace attire but with elements of a proper...

‘Contradiction with reality’ – Mourinho questions Bale’s social media poston February 12, 2021 at 4:17 pm

Tottenham boss Jose Mourinho says a midweek social media post by Gareth Bale is a "contradiction" with reality.Tottenham boss Jose Mourinho says a midweek...

Will there be a hosepipe ban in my area?on August 4, 2022 at 10:46 am

Dry weather has seen bans for some parts of southern England, but what about the rest of the UK?Dry weather has seen bans for...
Home of Science
Follow me