What happened
Every once in a while, the stock market gets it right. Every once in a while, stocks go up because of positive facts -- instead of down on negative sentiment.
That's happening today as shares of cruise tour company Carnival Corporation (CCL 0.43%) (CUK 0.63%) rise 4.2% on Thursday afternoon, followed by Norwegian Cruise Line Holdings (NCLH 0.83%) with a 4% gain, with Royal Caribbean (RCL -0.26%) bringing up the rear at 3.8% -- all numbers as of 3:15 p.m. ET.
Image source: Getty Images.
So what
Yesterday, Carnival shares were down on a negative note from investment bank Wells Fargo, which downgraded Carnival stock on worries that its "gradually improving fundamentals" might founder upon the rocks of rising oil prices and geopolitical tensions that would depress demand for cruise travel.
All of this might still happen, of course. But it also might not.
What we know for certain is that Carnival -- and Royal Caribbean and Norwegian Cruise, too -- all got some unambiguously good news yesterday, when in a late-breaking announcement, the U.S. Centers for Disease Control and Prevention (CDC) retracted its Travel Health Notice advising travelers to "avoid cruise travel, regardless of vaccination status" that's been in effect for the past three months, and also cut its risk assessment on the dangers of cruise travel from four (the highest risk possible) to just two (moderate risk).
Now what
Going forward, says the CDC, the agency will continue to provide cruise companies with advice and recommendations to keep their customers "safer and healthier." Those customers, however, will be free to "make their own risk assessment when choosing to travel on a cruise ship, much like they do in all other travel settings."
Cruise industry trade group the Cruise Lines International Association (CLIA) immediately applauded the decision, saying it will begin "to level the playing field between cruise and similarly situated venues on land, for the first time since March 2020," acknowledging that until now the CDC has had its finger on the scale tipping tourists away from cruise lines and implying this decision will be good for the cruise business.
When this news broke yesterday, I commented that such positive news "should outweigh the fact that one single analyst got marginally more pessimistic about Carnival stock," and suggested that the good CDC news "might actually be a buying opportunity."
And as cruise stocks turn higher today, it turns out that's exactly what it was.
