What happened
Shares of cruise line giant Carnival Corp (CCL 0.28%) were up as much as 39% in trading Tuesday as investors grew optimistic that a stimulus package would make its way through Congress. Shares settled throughout the day and by 2:50 p.m. EDT were up just 10.6%, still a nice gain for a stock that has been pummeled since the start of the year.
So what
Let's start with the good news. Congress appears to be close to passing a stimulus package that would include checks to every American and a reported $500 billion for lending to businesses. The checks could help ease the impact of mass layoffs and even give consumers some extra money to take a cruise when the COVID-19 pandemic is over.
Image source: Getty Images.
The bad news is that cruise lines don't seem likely right now to be the target of a bailout that may be needed to keep the industry afloat. But if the economy recovers in the next few months, a bailout may not be needed -- which is what investors are betting on today.
Now what
While there's optimism today, we've seen over the last few weeks that an up day can just as easily be followed by a down day that leaves investors in the red. And even a stimulus package may not be enough to save the cruise line industry long-term.
Given the uncertainty, I don't think Carnival is a top stock today and am still concerned that there are rough seas ahead in 2020.
