Why Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line Stocks All Just Bounced Back

What happened

Cruise line stocks Carnival Corporation (NYSE: CCL) (NYSE: CUK), Royal Caribbean (NYSE: RCL), and Norwegian Cruise Line Holdings (NYSE: NCLH) tumbled in tandem yesterday, apparently hurt (we guess?) by investor worries about Major League Baseball's decision to postpone some games. There have been reports of coronavirus infections among baseball players, and so the theory seems to be that it's not a good idea to gather large groups of people together in one single, contagious location.

(Shocker, I know).

And yet today, shares of Norwegian Cruise Line are back up 6.6%, Carnival Corporation is rising 4.5%, and Royal Caribbean has regained 3.8%. Why is that? 

Paper boat reads NEWS

Image source: Getty Images.

So what

Of course, there may be another reason that cruise stocks are rising. Last night, Senate Republicans finalized the details of their latest coronavirus stimulus plan: the Health, Economic Assistance, Liability Protection, and Schools or "HEALS" Act, to rival the Health and Economic Recovery Omnibus Emergency Solutions Act or "HEROES" Act that House Democrats passed in May.  

The GOP alternative, which Sen. Mitch McConnell calls "tailored and targeted," contains a second round of $1,200 stimulus checks for taxpayers, an extension of unemployment benefits at a reduced level (70% of employed earnings), and continued "paycheck protection" and tax credits to support businesses that are keeping employees on the payroll.  

Now what

Neither the HEALS Act nor the HEROES Act that preceded it is guaranteed to pass. Indeed, the fact that the HEALS Act contains only about $1 trillion in government stimulus, while the HEROES Act was valued at $3 trillion, tells you just how far apart these two pieces of legislation look to be. That being said, the fact that Republicans have now put an offer on the table raises hopes that additional stimulus legislation may now move forward as the two sides begin their negotiations.

Investors bidding up cruise industry stocks today may simply be thankful that Congress is now sailing out of the doldrums and starting to make headway.

10 stocks we like better than Carnival
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Carnival wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 2, 2020


Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More