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The Swine Flu outbreak keeps chugging along as the number of people affected rises.
Shares of all travel-related companies have been sickened by the threat of a really bad pandemic, as opposed to a mild flu with a lot of media hype. And the market concerns can hardly be sneezed at. During the hellish Spanish Flu Pandemic of 1918, when tens of millions died, the bug circumnavigated the globe once in a milder form before mutating into the more virulent and deadly form that killed so many.
Of the travel-related companies, Carnival Corp. (NYSE: CCL) has definitely been hit. Let's see -- a global flu pandemic is a great time to get on a boat, live for weeks in close quarters with thousands of strangers, and make port at multiple stops including many in the developing world where health care may not be so great. Piqqem Sentiment for Carnival is down over 21% in the past week, the biggest decline among high-activity shares.
During the past week, Carnival shares have been sliding, flopping from just shy of $30 to just below $25. That's still well off 52-week lows but heading in the wrong direction. Beyond Swine Flu, bad job numbers and the protracted (or possibly elusive) recovery bode poorly for a business that relies on discretionary spending. The markets cheered when Carnival returned to Mexico but that enthusiasm has clearly begun to reverse course.
So what are the stock markets and sentiment trackers telling us? That upside on a cruise line is a tenuous play at this point and that travel related stocks are still a very risky bet. So much for the floating party, folks.
Alex Salkever is the Director of Research at Piqqem, a stock prediction community powered by the Wisdom of Crowds.
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Reader Comments (Page 1 of 1)
5-28-2009 @ 12:21PM
Pip said...
Health care really doesn't play a role in a virus that cannot be treated, helped, or basically cared for. Could be anywhere in the world and the cure is the same: Tough it out.