Shares of cruise line giant Carnival Corp (NYSE:CCL) 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.
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.
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.
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.