Displaying items by tag: travel
We have ben warning for weeks that as the coronavirus continued to spread, airline and other travel stocks would continue to be wounded (and likely not recover soon). That is happening n a big way today as news of a quarantine in Italy sent markets into a panic about the spread of the disease beyond China. Cruise ships and airline stocks are taking body blows as a result, with Delta and American down 7% and 10% respectively.
FINSUM: These are massive losses, and the worst part about it is that there is unlikely to be a “V” shaped recovery in these sectors, as it will take some time for the public’s fear of the virus (and thus travel) to wane even after things start to get better.
Coronavirus fears continue to stalk markets. Just when it seems like it might be getting better, more news comes out to hurt markets. With that in mind, there are three sectors investors need to avoid because they will likely not recover from coronavirus for quite some time. Travel and tourism stocks are the main ones to avoid. Large US airlines have canceled all flights to the Chinese mainland until March and so far the estimate is that 13 million flights have been canceled. Cruse ships and other stocks that cater to tourists (even luxury retailers) are also likely to stay hurt for some time. Consider that even when the immediate panic over the virus dissipates, attitudes may have change and travel may not immediately recover.
FINSUM: We think the idea of behaviors changing is quite a valid one. For instance, one of the big worries within the Chinese stock market is that people may not continue to eat at restaurants because of general fears about infection.