Shares of AMC Entertainment (NYSE: AMC), The Norwegian yacht route (NASDAQ: NCLH), Carnival Cruise Line (NYSE: CCL) (NYSE: CUK)and Cruise Line Royal Caribbean (NYSE: RCL) ended the day higher as they were among the few “rebound stocks” that made significant gains today.
While there is no specific company news about these stocks, a number of factors appear to be contributing to their gains. First, investors hope that the outcome of this week̵7;s Federal Open Market Committee meeting, to be presented this afternoon, will help propel Congress through another round of stimulus and reassure investors. The investment is that the central bank will continue to do what it can to revive the market, helping these struggling firms maintain their borrowing capacity. The wave of stock price surges following the market assumption that a divided government would form – with Joe Biden elected president but Republicans holding the Senate – may also have helped the sector by spurring interest. general reason for securities.
Ultimately, the hope that COVID-19 vaccine will be approved later this year appears to also increase this stockpile, as AstraZeneca said their vaccine could be ready for large-scale distribution in December.
Carnival closed up 6.3%; Norway increased by 6.7%; Royal Caribbean increased by 5.6%; and the AMC by 6.5%. At the same time, S&P 500 ended the day 2% increase.
While cruise lines for yachts and AMCs tend to be similar, they are still active in different sectors.
In addition to the news above, travel stocks appear to be reacting to an update from Seaburn, a super-luxury travel agency, saying they are in demand for world yachts for 2022, a sign of Demand is compressed to the industry. as tours have been canceled in many parts of the world by 2020. Also, last week, the Centers for Disease Control (CDC) allowed tourist routes to reopen in phases. Combined with aggressive vaccine developments, there could be hope that American ships will set sail soon.
Despite the CDC policy change, Carnival recently announced that it won’t be taking any North American trips for the rest of the year, joining with Norwegian, has made a similar call. same day order. Royal Caribbean has yet to make such an announcement, but is likely to do so, given the hostile conditions it is facing. Carnival, the largest of the three festivals, has the highest monthly cash burn rate, estimated at around $ 530 million, showing how the pandemic caused the costly trio.
It is clear that these companies are among the most profitable vaccines, and with some drugmakers in the third phase of trial, the stocks may be susceptible to uncertainty. Any progress on that front.
Meanwhile, AMC issued a warning last month that it could be forced to go bankrupt by the end of the year or early next year if it doesn’t get new funding, or if the audience to theaters doesn’t improve significantly. While a vaccine will definitely help the theater operator, the company is having problems beyond weak customer demand. Studios are reluctant to release the film in theaters until they are confident that audiences will return, which may not happen until the end of the pandemic or a widely available vaccine.
So what now
With electoral uncertainty emerging, a slew of important updates coming to the vaccine front, rising cases of coronavirus and industry-level issues affecting both tourist routes. and movie theaters, the coming weeks will continue to see more volatility for these stocks. Despite their financial challenges, investors still see potential for recovery, and the Fed’s corrective policy and another stimulus will only help, but these stocks are in deep holes. finance. Hence, gains like today could represent market excitement more than anything else.