What happened

Shares of Live Nation Entertainment (NYSE:LYV), Six Flags (NYSE:SIX), and SeaWorld (NYSE:SEAS) all spiked higher in Wednesday trading. By close of the trading day, Live Nation shares ended 6.7% higher, Six Flags closed up 8.5%, and SeaWorld stock had risen 7.4%.

None of the three companies had any significant news to report today, however.

Three colorful arrows racing straight up on a black background

Image source: Getty Images.

So what

So why did Live Nation, Six Flags, and SeaWorld go up? Let's begin with the obvious: All three of these companies have business models centered on inviting large groups of people to congregate in the same place to be entertained -- concerts in the case of Live Nation, amusement parks for Six Flags, and at SeaWorld waterparks for, er, SeaWorld.

That's a tough sell in a world dominated by COVID-19 and social distancing. It's made even tougher when the customers these companies will be trying to attract may be among the millions of people who have lost their jobs to the recession.

For any (or all) of these companies' businesses to improve, therefore, we need two things. First, we need a solution to coronavirus. (Luckily, several companies are working on that.) And second, we need to see the economy opening back up, and employers rehiring their laid-off workers.

In that latter regard, today saw a couple of bullet points worth of good news. First, the Institute for Supply Management gauged the health of the service economy at "45.4." That number doesn't mean a whole lot without context. Basically, it's not great (anything below "50" indicates an economy in contraction), but it's also less terrible than it might have been (because experts had predicted the number would have been an even worse "44.7").

Second, HR company Automatic Data Processing issued a report on private-sector employment that showed jobs declining by 2.8 million in May. Not only was this a much smaller decline than the 20.2 million jobs reported lost in April, it was also a much less severe contraction than the 8.7 million job losses predicted by analysts prior to ADP's report coming out.  

Now what

Presumably, it's these indicia of an economy approaching its bottom, and thus likely to resume growth (eventually), that encouraged investors to dive back into Live Nation, Six Flags, and SeaWorld today. If that's the case, though, I'd just add two notes of caution.

First, the country is in an uproar, with demonstrations verging on riots happening daily in most major cities. I honestly can't imagine a lot of families wanting to drive through that to get to a concert, an amusement park, or even a water park.

And second, until we get coronavirus well and truly licked, it doesn't matter if the economy as a whole is contracting or expanding, whether by a little or by a lot. The simple fact of the matter is: People aren't going to feel comfortable congregating in great groups until they feel safe from coronavirus. And that's not going to happen until we have a vaccine that's proven both safe and effective.

Until that happens, an investment in Live Nation, Six Flags, or SeaWorld isn't really an investment at all. It's speculation.