Still Cruisin'

In New York State, Covid cases have never been higher. On most days, that news might have spurred another rush to so-called stay-at-home stocks -- the pandemic winners like Zoom Video and Peloton Interactive, which thrived as people brought activities into their homes. Last Friday, those stocks did well. 

But today the market was making a different bet: that Omicron would be fast-moving and less lethal than past variants. (We can all hope the optimism proves warranted.)

Four of the six best performing stocks in the S&P 500 today were in the travel space: Carnival (+3.4%), American Airlines (+2.1%), Norwegian Cruise Line (+2.0%), and Expedia Group (+2.0%). Those are the opposite of stay-at-home. 

The rally was spurred by an optimistic update from Carnival. The company said that 61% of its ships are now operating with guests on board, with the company expecting "the full fleet to be back in operation in the spring of 2022."

The company said that advanced bookings for the second half of 2022 and first half of 2023 "are at the higher end of historical ranges." And customer deposits were up $360 million in the fourth quarter; Carnival now has $3.5 billion worth of deposits for future sailings. 

On an investors call, the company expressed confidence it would manage through Omicron. Here's CEO Arnold Donald speaking to analysts this morning: 

While the variants and their corresponding effect on consumer confidence have created some near-term booking volatility, our book position has remained resilient and in the case of the Delta variant, already recovered. Importantly, these variants have not had a significant impact on our ultimate plan to return our full fleet to get to operations in the spring of 2022.

My colleague Lawrence Strauss spoke with Donald shortly before today's update. Then too, Donald sounded confident about returning to 100% service by this summer. "We don’t see anything from the variants—and the reactions to them—that would suggest that would be impossible," the Carnival CEO told Lawrence.

You can read the full interview here.