What happened

Carnival (CCL -2.04%) shareholders missed a big rally last month. Their stock fell 15% compared to a 5.5% increase in the S&P 500 in July, according to data provided by S&P Global Market Intelligence.

The cruise ship giant's shares are down by more than 70% so far in 2020 compared to a modest uptick in the broader market.

A retired couple on a cruise.

Image source: Getty Images.

So what

July was a volatile month for followers of the cruise ship industry. Carnival's shares initially jumped in the wake of its fiscal first-quarter earnings report and operating update. The stock then slumped following news that outbreaks in places like California were reversing plans to reopen parts of the U.S. economy.

Shares jumped again on optimism about progress on a COVID-19 vaccine, but ultimately the stock fell because it isn't clear when Carnival will be able to safely resume its operations.

Now what

Carnival is using the no-sail order time to rearrange its fleet and reduce its overall capacity, and these moves should lower its cost burden once the CDC lifts its regulatory hold on the cruise vacation industry.

In the meantime, investors might get some clarity from rival Royal Caribbean (RCL -0.98%), which is set to post its second-quarter results on Aug. 10. The company had said in mid-May that early bookings for 2021 seemed comparable to prior years. But that demand may have dried up as COVID-19 outbreaks spread deeper throughout the U.S. in recent weeks.

In any case, investors are bracing for some brutal numbers from Royal Caribbean as revenue falls to near-zero in Q2 compared to $2.8 billion a year ago.