Why Cruise Stocks Sank Again on Thursday
Well, how was that for a U-turn? Yesterday, the Federal Reserve announced a 0.75% rise in its interest rate target, and the stock market turned green. Cruise stock investors joined in the cheering, and shares of Carnival Corporation (NYSE: CCL), Royal Caribbean (NYSE: RCL), and Norwegian Cruise Line Holdings (NYSE: NCLH) all climbed higher.
Today, the opposite is happening. The stock market is glowing bright red, and so are the cruise stocks, with Carnival shares falling 10% as of 11 a.m. ET, Norwegian Cruise stock down 9.1%, and Royal Caribbean shares shedding 8.8%.
So what exactly is going on here, and what does it mean to cruise stock investors? Basically, the story goes like this: Up until a few days ago, investors were expecting the Fed to raise interest rates 0.5% in an attempt to tamp down rising inflation. (The idea being that when you raise interest rates, people take out fewer loans, buy less stuff, spend less -- and this decrease in demand results in lower prices, and less inflation).
Source Fool.com
