These businesses were the surprise winners of 2020

Shares of builders, including Lennar (LEN) and D.R. Horton (DHI), as well as retailers catering to homeowners, such as Home Depot (HD), Lowe’s (LOW) and Williams-Sonoma (WSM), soared in 2020. Home Depot sales increased 18%, while Lowe’s sales increased 23%.

What’s next: The outlook for 2021 remains strong, in large part due to the fact that mortgage rates are at record lows thanks to the Federal Reserve’s 2020 rate cuts and plunging long-term bond yields. The Fed has already said interest rates aren’t going up anytime soon. The Mortgage Bankers Association is predicting record purchase volume in the coming year. — Paul R. La Monica

Loser: Travel and Hospitality

Going on vacation wasn’t an option for most during the pandemic. The cruise industry was battered as Carnival (CCL), Royal Caribbean (RCL) and Norwegian (NCLH) were forced to suspend voyages for much of 2020 and into 2021. All three stocks plummeted between 45% and 60% this year.

The news wasn’t much better for hotel chains, which were hammered by a decline in demand for both leisure and business travel.

What’s next: The industry is hoping for a rebound as cooped-up would-be travelers look to hit the road in 2021 once vaccines are widely available, but it’s not clear whether business travel — the life blood of the industry — will approach pre-pandemic levels at a time when video conference calls are working out just fine.

Adding insult to injury for the big hotels, Airbnb, which had already turned the hospitality industry on its head, soared when it went public in December. The home sharing platform is now worth about $90 billion — more than twice as much as Marriott (MAR) and three times the market value of Hilton (HCYAX). — Paul R. La Monica

Winner: Cannabis

Marijuana is still not legal on the Federal level, but four more states approved cannabis use for recreational purposes on Election Day, making the drug legal in 13 states. The industry remains hopeful for a federal decriminalization of cannabis during the Biden administration. Products containing CBD — which is extracted from hemp and cannabis — are already legal and sales also surged in 2020.

All this helped drive a pot stock bonanza. Shares of Canopy Growth (CGC) and Cronos (CRON), backed by Constellation Brands and Altria, respectively, have soared since November. The stock of current industry leader Curaleaf (CURLF) skyrocketed too, nearly doubling on the year.

What’s next: There could be more consolidation in the industry in 2021 too, as companies look to combine following the December announcement that Tilray and Aphria were merging to create the world’s largest cannabis company. — Paul R. La Monica

Loser: Oil

Plenty of industries grappled with plunging prices in 2020, but oil is the only major commodity that went negative. The unprecedented trip below zero this spring was caused by an epic collapse in demand during the pandemic and a price war between Saudi Arabia and Russia.

Although crude rebounded, oil-and-gas companies are still in crisis. Dozens of frackers have gone bankrupt. The S&P 500’s energy sector is down by more than 30% this year, making it easily the worst performer in the stock market. ExxonMobil (XOM) would easily be the biggest loser in the Dow Jones Industrial Average — but the once-mighty company was ousted from the index this summer

What’s next: The oil industry certainly will benefit as the US economy reopens in 2021 and people start flying and driving more. But coronavirus vaccines won’t fix oil’s bigger threat: a climate crisis that is causing investors to dump fossil fuels. –Matt Egan

Winner: Solar

The rise of socially conscious investing helped carry the solar industry to a blockbuster year. Investors increasingly view fossil fuel companies as the prime contributor to the climate crisis — and they’re betting solar firms are a crucial part of the solution.

The Invesco Solar ETF (TAN) has spiked more than 200% this year. Sunrun (RUN), America’s largest rooftop solar company, is up more than 300%. These are staggering gains driven by strong demand for solar energy, the ascendance of the Environmental, Social and Corporate Governance (ESG) investing movement and enthusiasm over the coming reversal in Washington’s climate policy.

What’s next: The biggest challenge for solar stocks in 2021 is that they may be too hot. There will certainly be some growing pains before the sector truly lives up to the hype. But after four years of a climate-denier in the White House, President-elect Joe Biden’s promise to urgently address the climate crisis will undoubtedly help propel the solar industry. — Matt Egan

Loser: Banks

This was easily the worst year for America’s banks since the Great Recession. Lenders suffered tens of billions of dollars in losses as they braced for loan defaults and share prices spiraled lower. Even big banks such Citigroup (C) and Bank of America (BAC) are finishing the year sharply lower, and Wells Fargo (CBEAX) remains a hot mess

What’s next: The good news for banks: That’s what happens during recessions. Banks suffer as defaults mount, loan demand shrinks and interest rates plunge. The silver lining is that the US banking system just endured a real-world stress test — and it passed. Thanks in part to the emergency measures from the Federal Reserve and Congress, no major banks collapsed.

Booming financial markets also helped cushion the blow with banks cashing in as IPOs and debt sales surged. If Wall Street’s V-shaped recovery spreads to Main Street, banks stand to be winners in 2021. — Matt Egan

Winner: Bitcoin

Bitcoin and other cryptocurrencies plunged alongside the stock market shortly after Covid-19 ground the US economy to a standstill in March. But bitcoin (ARSC) has come roaring back to hit new all-time highs near $30,000 since then. Prices have more than tripled this year.

Investors have flocked to bitcoin as the US dollar has weakened — largely a result of the Fed slashing interest rates to zero. And top hedge fund managers Paul Tudor Jones and Stanley Druckenmiller helped validate bitcoin with investments this year. Many investors view bitcoin as a replacement for gold — a hedge against further declines in the dollar.

What’s next: Bitcoin may become a more acceptable form of digital payments in 2021 now that fintech powerhouses Square (SQ) and PayPal (PYPL) are both letting users buy, sell and hold bitcoin. But Skybridge Capital founder Anthony Scaramucci, who has a big stake in bitcoin, warned investors that the digital currency is due for a crash. He believes it remains a strong investment, but it could suddenly tumble 20% to 50%. — Paul R. La Monica

Loser: Airlines

The airline industry had awful years in the past, but none were as devastatingly horrendous as 2020.

US air travel came to a virtual halt in April. Traffic rebounded modestly late in the year, despite climbing Covid-19 cases, but the number of passengers screened by TSA at US airports was still down 63% compared to a year ago during the holiday travel season.

Airlines got $50 billion in grants and loans from the federal government earlier this year to weather the storm and are poised to get an additional $15 billion from the recently passed stimulus package. But they still lost $24.2 billion in the first nine months of this year.

What’s next: More losses are expected in the fourth quarter and into 2021. Air travel isn’t expected to recover for several years, even as the vaccine raises hopes for the end of the pandemic. Air traffic, especially the more lucrative business travel, typically takes several years to recover following a recession. — Chris Isidore

Winner: Video games

Consumers were stuck at home this year, and video games gave players an opportunity to pass the time alone while still interacting with their friends. That helped the video games industry boom this year, from sold out Nintendo Switch consoles, to record growth on streaming platforms, including Facebook Gaming and Amazon’s Twitch. Esports benefited, too, when traditional sports were paused.

In March, as countries around the world were heading into lockdown, “Animal Crossing: New Horizons” was released and became a record hit for Nintendo, selling 26 million copies at $60 apiece. Google’s video platform YouTube logged its best year ever in 2020 with more than 100 billion hours in gaming content viewed.

What’s next: Experts predict the gaming industry is set to keep growing in 2021. Despite a crushing recession, gamers still managed to purchase all the available PlayStation 5 and Xbox Series X consoles this year at $499 a pop. — Shannon Liao

Loser: Malls

Several national mall-staple department stores, which were already struggling before the pandemic, toppled into bankruptcy, including JCPenney, Neiman Marcus and Lord & Taylor. Although the first two are still in business, Lord & Taylor announced it would shut all its stores.

Clothing retailers were particularly hard hit, as millions of people lost jobs and millions more shifted to working from home, reducing the need to buy office clothes. Tailored Brands, which operates Men’s Warehouse and Jos. A. Bank, and Ascena, owner of Ann Taylor and Lane Bryant, both fell into bankruptcy.

The pandemic devastated mall owners. Most malls were forced to close during lockdown orders of the spring, and the wave of bankruptcies by tenants left them with billions in unpaid rent.

What’s next: The future of malls will depend on how successful they are finding non-traditional tenants to take the place of retailers who will not be returning. Malls were in deep trouble before the pandemic, which only exacerbated their declines. — Chris Isidore

Winner: Big Retail

Amazon (AMZN) and other online retailers were among the biggest winners of the pandemic, as people grew cautious about leaving their homes. But big-box stores, such as Walmart (WMT), Target (TGT) and Costco (COST), also won big, as shoppers flocked to stores where they could get all their shopping done in one go. Sales increased 7% at Walmart, 12% at Costco and 19% at Target in their most recent past three quarters.

Those stores were deemed essential and were allowed to remain open during the spring when many other stores were forced to close. Target and Walmart also increased their online sales thanks to curbside pickup.

What’s next: Big retailers aren’t expected to lose any ground once the pandemic ends, even if the pace of sales growth slows down. They ramped up their digital operations in 2020 and are well-positioned to succeed in the future, even after customers feel comfortable shopping at local stores again. — Chris Isidore

Loser: Automakers

The auto industry suffered a body blow from the pandemic in its early months, as factories shut down and demand for cars fell sharply.

Job losses soared and car companies reduced shifts for millions of autoworkers. Rental car companies, typically a major buyer of new cars, virtually stopped their purchases as air travel ground to a halt and demand for rental cars plummeted. At 102-years-old, Hertz (HTZ) was forced to file for bankruptcy.

What’s next: Demand for cars has rebounded much faster than many expected. Although auto sales are not forecast to return to 2019 levels any time soon, the pandemic has given car sales an unexpected boost: Many commuters are concerned about using public transit or ride-hailing services such as Uber (UBER). That could boost the auto industry recovery in 2021. — Chris Isidore

Winner: Big Tech

Technology emerged a winner during the pandemic as cloud and connectivity services thrived in a stay-at-home world.

Netflix (NFLX) revenue jumped 73% in the most recent three quarters. Video conferencing service Zoom’s sales soared 307%. And Amazon was among the biggest winners, with sales leaping $67 billion, or 35%, in the first three quarters of the year.

America’s economy grew more dependent on the technology sector than on traditional sectors such as manufacturing or retail. So investors rushed to buy up tech stocks, driving up their value. The nation’s five most valuable companies — Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Google owner Alphabet (GOOG) and Facebook (FB), are now worth more than $7.5 trillion combined.

What’s next: Growing antitrust scrutiny poses a big existential threat to technology companies. Although the disputes aren’t likely to get resolved anytime soon, legal and regulatory action to rein in Big Tech has become a rare bipartisan issue in Washington. — Chris Isidore

Loser: Manufacturing

Traditional manufacturing had a very tough year. Industrial production plunged 16.5% between February and April. Even after rebounding, the nation’s factories are still producing at 5% below their pre-pandemic levels. America’s aluminum production is down 8.1% while steel production is down 18%.

No manufacturer had more trouble than Boeing (BA) in 2020, which was hit by the downturn in air travel and airline customers trying to conserve cash and delay or cancel aircraft purchases. Boeing came into the year as the nation’s largest exporter, so the near-halt of commercial aircraft purchases was a major drag on the broader economy.

What’s next: The manufacturing sector continues to be an important part of the US economy. But every time it goes through a downturn like this, it rarely bounces back to its previous level. So the importance of manufacturing to the nation’s overall economic health will almost certainly continue to wane. — Chris Isidore

Winner: Creators

Creators have been finding ways to keep their content fresh and innovative throughout 2020, especially during the pandemic. The platforms that support these creators have benefited significantly.

Twitch downloads jumped 61% worldwide from January to November, according to Apptopia, a mobile app and business intelligence company. Patreon, a social and membership platform for content creators, grew 43%, and downloads of Cameo, an app that allows you to pay for celebrity shout-outs, rose 134%. These platforms allowed creators to produce content easier, broadcast it further and also monetize it. That’s due in part to pandemic lockdowns that have helped redefine the creator landscape of who gets noticed and why — with social media serving as the megaphone for the content these creators share and post.

What’s next: Social giants like Facebook and Snapchat have taken note, launching their own versions of popular creator platforms like TikTok to compete and keep up with the content craze. It’s a signal that the meteoric growth the creator landscape has seen this year will only continue in 2021. — Jazmin Goodwin

Loser: Movie Theaters

The coronavirus pandemic forced theaters shut around the world, leading US box office sales to plummet nearly 80%, according to Comscore, It also pushed more people stuck at home to streaming. Netflix and Disney+ thrived while the $43 billion global theater global business was ravaged.

What’s next: With traditional studios including Disney and Warner Bros. going all-in on their streaming ventures, theaters find themselves in a perilous position. But the biggest question in Hollywood is will consumers return to the cineplex once vaccines hit critical mass, or have the glory days of going the movies reached their final act? –Frank Pallotta

Winner: Streaming

For years, it seemed as if streaming and movie theaters were at war with one another. Streamers such as Netflix wanted to deliver entertainment to consumers whenever, wherever and theaters wanted to maintain the exclusivity that’s been vital to their business (and popcorn sales) for the last century. In 2020, it appears that streaming won.

What’s next: Streaming is clearly here to stay. Warner Bros. made the bold decision to release all of its films simultaneously in theaters and on HBO Max. Disney+ has recorded electric growth with an impressive slate for 2021 and beyond. And Netflix continues to spend big to produce the original content that has made it so popular.