After trending lower for the last few months in what now looks like an anticipatory move in advance of the current COVID wave, travel & leisure stocks have bounced back in a big way over the last week. Every one of the travel & leisure stocks in the snapshot below is up 5%+ over the last week, with MGM Resorts (MGM) up the most at +9%. The three cruise stocks — Norwegian (NCLH), Royal Caribbean (RCL), and Carnival (CCL) — have bounced 7-8% over the last week, while the airlines are up between 5-6%.
A week ago, most of these travel & leisure stocks were trading in oversold territory, but they are all back in “neutral” territory now, meaning they’re between one standard deviation above and below their 50-DMAs. The hotels and cruise stocks have largely crossed back above their 50-DMAs, while the airlines are still sitting below them.
As you can see, even though they’ve had a rough time over the last few months, all of these travel & leisure stocks are still in the green on a year-to-date basis, with MGM and American Airlines (AAL) up the most at 33.7% and 27.77%, respectively.
The underperformance of these names well ahead of the current COVID wave and their recent bounces in the midst of the wave serves as an important reminder that it’s often the case that the markets knew the headlines you’re reading today months ago. Click here to start a Bespoke Premium trial and start building your own custom portfolios.