🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

US State Quarantines Sink Cruise Line Shares And Bank Stress Tests

Published 25/06/2020, 09:04
US500
-
IXIC
-
CCL
-
  • Cruise line shares tank after State Quarantine rules introduced
  • Euro sinks after new tariffs threats on the EU
  • Economic Calendar: ECB minutes, Jobless claims, US GDP
  • Bank shares: US Bank Stress Test results later
  • Markets

    After a big run up that saw the Nasdaq rise eight days in a row despite rising coronavirus infections, markets fell under their own weight on Wednesday. European indices were crunched, dropping over 3%. Reports the US might imposes new tariffs and the IMF lowering growth forecasts are still hanging over European shares on Thursday.

    Quarantine & Cruises

    New quarantine rules for travellers from some US states was the tipping point for investor doubts about the impact of rising coronavirus cases. New York, New Jersey and Connecticut will make travellers from California, Florida and Texas quarantine for 14 days.

    Before yesterday investors were content with the idea of localised lockdowns as occurred in Germany. Inter-state travel restrictions will undoubtedly hurt the economic recovery. A 14-day quarantine as good as kills off the prospect of travel to and from these states for holiday (vacation!) purposes. New Yorkers travelling to Florida for cruises would have been a necessary ingredient for US-based cruises. Carnival (NYSE:CCL) cruises.

    Bank Stress Tests

    All eyes will be on the CCAR (not Credence Clearwater Revival..!) the Comprehensive Capital analysis and Review. Here we will find out which of the bank’s capital plans are approved by the Fed. Bank shareholders are worried that the Fed will prefer to make capital available for the economy than for their pockets.

    They probably needn’t be too worried. Bank loan loss reserves are high and banks have not been issuing highly leveraged loans- except credit cards- since 2009. We suspect most bank dividends are secure and that could spur a relief rally in the under-performing shares. Share buybacks have become a political hot potato and may get deferred but perhaps not to the detriment of share prices.

    Chart: Cruise lines (1-month)

    S&P 500 Index Chart

    Cruise line shares have been a leading indicator for market strength and weakness. Having outperformed when markets broke higher, the shares are now down again versus the S&P 500 in the last month.

    Original Post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.