The 'short travel, long stay-at-home' trade is working amid the coronavirus sell-off

Published Thu, Feb 27 20207:41 AM EST

(This story is for CNBC Pro subscribers only.) The coronavirus-driven narrative that people are less willing to leave their homes is playing out nicely in the stock market this week. Stay-at-home stocks are outperforming the broader market and companies that promote travel due to the threat of the spreading deadly virus. Despite the broader market sell-off, Peloton , which sells stationary bikes for in-home cycling classes, rose more than 14% this week. Streaming platform Netflix only fell about 0.2% and Zoom Video , which provides remote conferencing services for companies, has gained 5% since Monday. The major stock averages dropped on Wednesday, continuing a dismal week for stocks as investors worry about a dent to global economic growth due to the coronavirus. Certain stocks that promote going out and traveling have suffered that most. Booking company Expedia , ride hailing company Uber and United Airlines have all tanked about 15% this week alone, adding to the markets tailspin. CNBC's David Faber pointed out this phenomenon in a tweet on Wednesday. Peloton rose more than 7% and Netflix jumped more than 5% on Wednesday. tweet Bernstein said Wednesday Zoom Video has already added more active users in 2020 than in all of 2019 combined. The Wall Street firm called Zoom a "safe haven" during this time of coronavirus uncertainty. Bernstein has an outperform rating and $125 per share price target on the stock. Ritholtz Wealth Management's Josh Brown, who owns Zoom, also pointed out virtual doctor visits company Teladoc Health, has rallied nearly 2% this week. "Think of a better positioned company than [Teladoc], I don't think you could," Brown said on CNBC's "Closing Bell." A lot of meetings that take place in person that require travel probably will get moved to virtual, a lot of doctor visits that maybe people don't feel like going somewhere where someone else might be sick, that could become virtual. " Teladoc shares surged 17% in after hours trading on Wednesday following its quarterly earnings. Teladoc reported a loss that was narrower than analysts expected, 26 cents per share compared to the 35 cents expected, according to Refinitiv. Revenue also topped estimates. However, Brown said to be careful of "buying into a narrative" that could only popular for a few days. — with reporting from CNBC's Michael Bloom.

Peloton machine

Source: Peloton

(This story is for CNBC Pro subscribers only.)

The coronavirus-driven narrative that people are less willing to leave their homes is playing out nicely in the stock market this week.

Stay-at-home stocks are outperforming the broader market and companies that promote travel due to the threat of the spreading deadly virus.