Stock Market Today: Carnival Bookings Surge; Chesapeake on the Brink

Despite a strong rally to end Friday’s session, the bears began Monday’s session with some momentum. However, bulls not only erased a bulk of those losses in the stock market today, they actually flipped stocks into positive territory.

An uncertain future combined with poor (and often record) economic readings has done little to slow the market’s bullish roll. It leaves many wondering if equities can continue higher in the days and weeks to come.

For the S&P 500, the index is fast approaching the April high near 2,955. A move above it could trigger a rally back toward the key 3,000 level. Let’s keep an eye on how it does over the next few days.

The market’s rally might be too good to be true, according to Goldman’s David Kostin. He says $103 billion is expected in bank loan losses over the next year. Combine that with a lack of buybacks, dividend cuts and domestic and global political uncertainty. Further, Kostin worries that novel coronavirus cases could worsen in other parts of the country as people return to normalcy.

A Tale of Two C’s

Consumers are ready to hit the seas, evident by the 600% surge in Carnival’s (NYSE:CCL) recent bookings.

After the company announced some possible cruises in August, bookings for the next three days were up 600% compared to the prior three-day reading. They were also up 200% year-over-year. If the Centers for Disease Control and Prevention signs off on the plan, there will be additional guidelines to follow. They include health screenings, no self-serve buffets, restricted occupancy in many areas and medical notes ensuring passengers aren’t at risk.

On Monday, Chesapeake Energy (NYSE:CHK) withdrew its prior guidance. Management says it does not expect to be in compliance with financial covenants beginning in Q4. Further, they have “concluded that there is substantial doubt about the company’s ability to continue as a going concern.”

Shares traded down 12.2% to $12.90 in the stock market today, but did not make new 52-week low.

Movers in the Stock Market Today

Tesla (NASDAQ:TSLA) saw some rough sales numbers for April. There was a 64% decrease in sales of its Model 3 sedan in China for the month. Even as electric vehicle sales increased 9.8%, the Model 3 was down to 3,635 units in April. That’s compared to sales of 10,160 vehicles in March. Expectations call for a rebound in sales as the country recovers from the coronavirus outbreak, according to the China Passenger Car Association.

“State and local health departments have the greatest insight into community-level needs in the COVID-19 response,” according to a statement from the Department of Health and Human Services. That’s why these officials will be the ones to distribute Gilead’s (NASDAQ:GILD) remdesivir to hospitals.

Gilead will donate 607,000 vials of remdesivir over the next six weeks to roughly 78,000 coronavirus patients in hospitals. In total, Gilead will donate 1.5 million vials worldwide.

Apple (NASDAQ:AAPL) is trying to move more of its production from China to India over the next five years — up to a fifth to be exact. Reportedly, $40 billion worth of iPhones could be made in India. With only $1.5 billion worth of iPhones sold locally, it would mean that most would be produced for export.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Kenwell is long AAPL.

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