There was a near three weeks and 10% correction for the S&P 500 ahead of the US Presidential election date on November 3. In addition to this, the correction in the S&P had essentially run its course by the day before the count, something which meant that the S&P 500 had a full week to anticipate and celebrate a likely Joe Biden victory.
However, the rally was supercharged on November 9 by the announcement Pfizer (PFE) made regarding having developed a COVID-19 vaccine.
Almost instantly, the bulk of the stocks exposed to the pandemic rallied as strongly as they have all year, with cruise line operator Carnival shares topping the S&P 500 leaderboard with a 39% gain. The question now is whether the CCL share price can build on the vaccine news good fortune?
Carnival share price and COVID-19
Clearly the post March environment for the Carnival share price has been blighted by the COVID-19 pandemic, with the outbreak of COVID-19 on Carnival’s Diamond Prince cruise ship in March becoming a latter day Titanic in terms of negative impact on the company and its sector. At the time, like many other companies in the hospitality and leisure sectors, the CCL share price tumbled.
In this case pre-pandemic peaks were above $51 and the April floor below $8. This was off the back of the US Center for Disease Control and Prevention issuing a no sail order in March, with Carnival itself then suspending the dividend after predicting a loss for the year to November 30.
The CCL share price and lifting the no-sail order
Interestingly, even before the announcement of the COVID-19 vaccine on November 8, the CDC lifted the no-sail order. The move to conditional sail status saw the CCL rebound from $12, with the Pfizer announcement then leading to a near term peak for the Carnival share price at $19.86.
CCL shares have been subject to two massive bullish drivers in the space of days, and while they have recovered well in percentage terms, there are a number of factors to be addressed before investors can regard the fundamental coast as being clear.
Carnival Share Price: $1.5bn stock sale
This point was underlined the day following the explosive 39% rise for CCL stock on November 8. Carnival itself took the wind out of the sails of buyers by announcing plans to sell $1.5bn in stock just the following day.
The immediacy of this announcement highlights the cash crunch companies like Carnival have suffered in recent months, and the way that the road to recovery will be a long one.
The $1.5bn stock funding move contrasts with a Q3 loss reported last month of $2.86bn, albeit less bad than feared. Revenues fell from over $6bn to just $31m for the same quarter last year.
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How to trade shares with ATFX
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1. Register for an account or log in to your existing account
2. Open MT4 either on your desktop or mobile
3. Search for Carnival shares in the market watch or symbols window
4. Choose your position size
5. Hit buy or sell, and then confirm the trade
CCL Share Price Daily Chart
With CCL shares falling by some 75% from February to April this year, there was always going to need to be a significant driver to end the 2020 breakdown for the stock. What may be key in the near term is the relationship of the shares with the 200 day moving average at $18.
While there has so far been a brief spike through this feature, a weekly close above $18 is probably needed to change the downtrend of 2020.
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