US equities post-Covid-19: The winners and losers as the economy recovers

Tech and healthcare offer the best investment opportunities for the remainder of 2020

As we close the first half of 2020, large-cap US stocks have gained back nearly all losses suffered in the violent March sell-off spurred by the coronavirus pandemic.

One of the surprising things about the downturn and robust recovery is that momentum and growth stocks have continued to lead. Typically, defensive sectors such as healthcare and consumer staples hold up best in bear markets while cyclicals such as industrials lead recoveries, especially those supported by policy stimulus. It is surprising but explainable as technology has been less cyclical due to the nature of the virus shutdown and work from home scenarios as the pandemic has accelerated digital transformation. One of the surprises of Q1 earnings results was the broad strength o...