The world changed dramatically with the onslaught of the COVID pandemic in early 2020. Businesses were forced to digitize, consumers saved at historic rates, the Federal Government and Federal Reserve flooded the economy with cash, new hobbies were picked up faster than a dropped hundred dollar bill, and consumers emerged from the lockdowns financially stronger than ever. Long story short, COVID appeared to permanently alter the ways in which consumers and businesses interact, and companies that stood to benefit from the new way of life saw their stocks surge while the old-economy stalwarts were crushed. That was then.

This is now. As the economy has emerged from COVID, the cost of inputs has skyrocketed, real buying power has diminished, supply chains have become strained, and geopolitical tensions are hot. Not only that, but whereas the rate of fiscal and monetary stimulus was stronger than ever during the pandemic, the headwind from their removal is as intense as it gets.

Given the shifts, a number of stocks that originally surged in the COVID world have been hit hard in the post-Covid environment, and some of the biggest COVID losers during the lockdowns have turned into market leaders. As things currently stand, 40.6% of S&P 500 members are below their pre-COVID highs (closing high price from the start of 2019 through the end of February 2020), even as the index is up 18.0% from its pre-COVID closing high on 2/19/20. Besides the fact that four out of every ten S&P 500 stocks are below their pre-COVID highs, 8.1% of the index members are within 5% of their pre-COVID high and another 7.1% are within 10% of their pre-COVID highs.

At the sector level, three sectors – Communication Services, Real Estate, and Utilities- have more than half of their components trading below their pre-COVID highs. In addition to those three sectors, in both the Consumer Discretionary and Financials sectors, more than 40% of components are below their pre-COVID highs, and another 10% of each sector’s components are within 10% of those former highs. At the other end of the spectrum, the original ‘losers’ from COVID like Energy and Materials have fewer than a quarter of their components trading below their pre-COVID highs. While it seems some days like COVID will never go away, the rallies that a large number of stocks experienced are now nothing more than memories.