Cruise Stocks Alert: Why Are NCLH, RCL, CCL Stocks Sailing Higher Today?

Cruise stocks were big winners on Monday following promising, albeit inconclusive, news about the severity of the omicron variant.

a cruise ship in the ocean with the sun going down


Health experts in South Africa, the known origin of the Covid-19 variant, have stated that despite the rise in cases and hospitalizations in the Tshwane District, most patients don’t currently need oxygen.

This is good news. Omicron fears have been a major market driver in the past few weeks, largely due to the belief it will be more contagious and deadly than even the delta variant.

An early patient profile paints a rather compelling picture:

“A snapshot of 42 patients in the ward on 2 December 2021 reveals that 29 (70%) are not oxygen dependent. These patients are saturating well on room air and do not present with any respiratory symptoms. These are the patients that we would call ‘incidental COVID admissions’, having had another medical or surgical reason for admission. … The numbers of patients in high care on double oxygen, High Flow Nasal Oxygen or non-invasive ventilation (NIV) were noticeably higher in previous waves.”

Additionally, Dr. Anthony Fauci, the White House’s top medical advisor, said early data suggest the omicron variant is not as severe as many initially feared.

A silver lining for Covid-19 usually translates into strong gains for travel and hospitality industries, which rings true today. Royal Caribbean (NYSE:RCL), Norwegian (NYSE:NCLH) and Carnival (NYSE:CCL) each closed up around 10%.

What Does This Mean for Cruise Stocks?

There are a few points of clarification required. First, the above report has not been peer-reviewed. One set of doctors and professors gathered the data on site in South Africa. Secondly, it was a profile on a small sample of Covid-19 patients, and as such, could have dramatically different characteristics on a larger scale. Lastly, the results recorded for the patients represent only the first two weeks of this latest omicron wave. This, even according to the study, leaves plenty of room for discoveries to change.

“The clinical profile of admitted patients could change significantly over the next two weeks, by which time we can draw conclusions about the severity of disease with greater precision.”

So, while the cruise stock rally is warranted, it might be a bit early to book your next voyage.

Cruise stocks have experienced rough waters in the Covid-19 era, but they have started to see glimpses of hope. Today, that hope looks a bit more powerful. Just days after cruise stocks met a year-low on Dec. 1, they’re back with a vengeance. Today makes Norwegian’s biggest one-day rally in more than a year as the other cruise stocks closely ride its coattails.

On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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