Hello all, this might be my first post on this forum, I can’t recall any others, but I have been lurking for a while.
From a macro perspective, I am wondering why stocks like Carnival and Booking are going up so much?? We know all the plans that have been laid out by TFG (the former guy), who is now the next guy. Those plans involve things like changes to Health and Human services (so vaccines) and tariffs across the board (so higher prices) and the 2025 wants to eliminate the ability to track THE WEATHER…so… in the face of those, why is there so much confidence in travel stocks?
(Booking.com has been in a managed account for many years, and was once [back when I was paying member] a Fooldom favorite. So I’m trying to figure out my risk here…)
In general, travel stocks doing well is a sign of consumer confidence. The consumer confidence index was up nicely last month.
Confidence Rebounded in October as Consumers Regained Faith in the US Economy
The Conference Board Consumer Confidence Index increased in October to 108.7 (1985=100), up from 99.2 in September. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased by 14.2 points to 138.
The consumer confidence survey is a month old, but I took the comment in the OP to mean travel stocks are flying now, like last week and today. That would imply enthusiasm for the utopia that has been promised.
Yes, a combination of the two – some post-election euphoria added to the previous optimism. Carnival, for example, is up some 10% since the election, but was already up 60% from early August.
I have been watching the cruise lines and find RCL best choice.
Covid caused cruise lines to borrow heavily to survive. End of Covid brought a surge of traffic but are just now returning to profitability. RCL has the strongest balance sheet.
I agree consumer confidence is the cause.
Many consumer stocks have missed on earnings claiming that consumers are squeezed by inflation and being more selective on spending.
Investors seem to believe falling interest rates will reverse the trend and fill in the gaps. Cruisers tend to be upper middle class and less sensitive to inflation.
Retail sales rose 0.4% in October. Economists had expected a 0.3% spending, according to Bloomberg data. Meanwhile, retail sales in September were revised up to a 0.8% increase from a prior reading that showed a 0.4% increase in the month, according to Census Bureau data. Auto sales drove a majority of the gains in October’s reading with sales in the sector rising 1.6%.
I know I am following a turn in the conversation, but since I am the OP…lol…
This post by DrBob makes me wonder how much spending is going to pull forward due to people trying to avoid tariffs and inflation. I know I am looking to see what big ticket items we can do now…especially any additional batteries for our solar system.
Depends which type(s) of batteries will be available from US mfrs. Buy now makes sense because US mfrs will jack up prices to be just under imported batteries.
Classic “make or buy” decision. It may be that the imported product, even with a steep tariff, is still cheaper than building a new factory, and starting production in the US. Didn’t Apple say, a few years ago, that it would be impossible to build their phones in the US? If so, then nothing happens, except the consumer pays more, for the same stuff.
Not to mention the tax advantages of manufacturing in Asia for shipments around the globe and collecting profits in a low tax country-- minimizing taxes in the US.