What happened

Wall Street ended Monday in the green, with the Dow Jones Industrial Average up a solid 1.5%. And some stocks are looking a whole lot greener than others. Investors appear particularly enthusiastic about travel and resort companies, for example, with the following four reaping outsize gains:

  • MGM Resorts (MGM 0.15%) stock closed 9.2% higher.
  • Vail Resorts (MTN 1.35%) was up 10.9%.
  • Eldorado Resorts (ERI) shares rose 14%.
  • And Avis Budget Group (CAR -3.04%), the car rental company that helps travelers get to their destinations, did best of all: up 16.2%!
Happy gamblers rolling dice at a craps table

Image source: Getty Images.

So what

The news affecting these companies specifically was mostly thin today. Vail, the ski resort operator, did report that members of its season pass program can apply credits from their 2019/2020 season pass toward a 2020/2021 season pass. The bad news for investors is that as a result of this, Vail said it "will be delaying the recognition of approximately $118 million of our deferred season pass revenue, as well as approximately $3 million of related deferred costs, that would have been recognized in the remainder of fiscal 2020 and will now be recognized in the second and third quarters of fiscal 2021." This will hopefully improve its numbers next year, but probably hurt its numbers this year.  

Regardless, Vail stock was up today, as were the others. And in the absence of any good news about the companies specifically, we'll have to look to more macroeconomic developments for our answers today.

Investors in companies dependent upon discretionary spending for their success appear to be encouraged today by moves to open up the U.S. economy again after more than a month of COVID-19-inspired lockdowns. In Oklahoma, hair and nail salons, pet groomers, and spas opened on Friday. And in New York State, Gov. Andrew Cuomo says he plans to "unpause" the economy on May 15. Meanwhile, Vice President Mike Pence predicts the COVID-19 crisis will be largely behind us by Memorial Day.  

Now what

Of course, if this is the future we can expect, one has to wonder why Vail Resorts is talking about shifting revenue from the 2020 ski season (which you'll note begins quite a bit after May 25) into 2021. One might even begin to suspect that Vail has been listening more to Dr. Deborah Birx of the White House coronavirus task force, who says "social distancing will be with us through the summer," and less to the vice president.

If Dr. Birx is correct, we still have a good three to four months ahead of us -- at minimum -- in which consumers will remain largely confined to their homes and consumer spending will remain generally depressed. And as for consumers flocking to buy plane tickets, reserve cars from Avis, and travel to throng the casinos of MGM and Eldorado, I have my doubts about that. Simply put, crowded airplanes and casino floors aren't the easiest places in which to practice social distancing.

So will America really reopen for business and resume traveling by May? I'd love to be proven wrong, but no, I wouldn't bet on it.