Investors favour alcohol

Alcohol share prices in the US are far stronger than before the covid-19 slump struck with the US Alcoholic Beverages/Drinks Index up a fifth over the full year, having almost halved in February (see chart).

A share price rise needn’t necessarily indicate an expectation of higher profits or revenue. It could be a “flight to safety”, where people make more reliable bets in crises, which is why gold prices go up.

Interpreting share movements is a matter of speculation. This interpretation would indicate the US financial market expects alcohol to fair relatively well and is willing to bank on it. ■