Worrisome remarks by a crucial health authorities terrified financiers.
What happened
Cruise ship stocks decreased on Wednesday ahead of Norwegian Cruise Line Holdings‘ ( NYSE: NCLH) upcoming profits report on Thursday morning. Shares of Carnival( NYSE: CCL), Royal Caribbean( NYSE: RCL), and Norwegian fell 7%, 5%, and 7%, respectively.
So what
Following comments by health officials, investors seem growing more worried that a vaccine for COVID-19 might take longer than hoped.
On Tuesday, Dr. Anthony Fauci, director of the National Institute of Allergic Reaction and Contagious Diseases, told a Senate committee that a vaccine or widely readily available treatment for the illness brought on by the coronavirus would more than likely not be prepared by the fall. Fauci did express hope that a vaccine could be found in the next year or two, though he warned, “There’s no assurance that the vaccine is really going to work.”
Fauci likewise warned Congress that resuming the economy too soon could have dire repercussions. “There is a real danger that you will set off an outbreak that you might not be able to control, which in fact, paradoxically, will set you back, not only leading to some suffering and death that could be avoided, but might even set you back on the road to attempt to get economic healing,” he said.
The cruise ship market may deal with dark skies for far longer than lots of investors expected. Image source: Getty Images.
Now what
These comments likely had investors reviewing their outlook for cruise liner business, which are especially exposed to COVID-19 outbreaks. Worries are growing that health officials might choose to extend the sailing restrictions placed on cruise ship operators during the pandemic. With their ships stuck in port, Royal Caribbean, Norwegian, and Carnival are all bleeding cash, and any further delays in resuming their operations might have a disastrous effect on their currently beleaguered balance sheets.
Investors can anticipate to get an upgrade on Norwegian’s existing outlook for the cruise liner industry when it reports earnings on Thursday.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.
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Joe Tenebruso has no position in any of the stocks discussed.
The Motley Fool recommends Carnival.
The Motley Fool has a disclosure policy
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source https://jobsearchtips.net/why-carnival-royal-caribbean-and-norwegian-cruise-line-stocks-sank-today/
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