On Monday, July 19, financial markets hit instant replay.
As fear spread that the Delta variant of Covid-19 might ravage the economy, U.S. stocks fell more than 2% at their lows. Crude oil sank 7.5%, its biggest daily loss in almost a year.
Airlines, oil and gas, cruise lines, hotels and shopping malls got pounded—just as they had in February and March 2020. Grocery stores, online retailers, pharmaceuticals, technology and personal-hygiene stocks went up or held steady; they fared relatively well during last year’s panic, too.
Past performance suddenly felt like a guarantee of future results—but investors should always remember that it isn’t.
How similar was this Monday to last year’s pandemic panic? Eight of the 20 worst decliners in the S&P 500 this time had been among those with the deepest losses last time. United Airlines Holdings Inc., down 5.5% this past Monday, had fallen 66.9% between Feb. 19 and March 23, 2020. Oneok Inc., the natural-gas company, fell 5.8% on Monday and 74.5% in the 2020 decline. Norwegian Cruise Line Holdings Ltd. dropped 5.5% on Monday and 81.4% in last year’s Covid crash.