Airlines and cruise stocks tumble as Trump’s positive virus test dents the reopening trade
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- Stocks that are closely tied to the reopening of the American economy were crushed in Friday trades after President Trump tested positive for COVID-19.
- The news served as a reminder to investors just how precarious the economic reopening is as Winter approaches and daily COVID-19 cases are on the rise.
- Airlines and cruise stocks led the decline lower on Friday.
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The reopening trade, or buying stocks that are closely tied to the reopening of the American economy, was crushed on Friday after it was revealed that President Trump and First Lady Melania Trump have tested positive for COVID-19.
The news served as a stark reminder to investors that anyone can get the virus, the reopening of the economy is precarious without a readily available vaccine, and daily COVID-19 cases are on the rise as winter approaches.
Stocks most commonly bought by investors to gain exposure to the reopening trade include airline, cruise line, and casino stocks, among others. Primarily, the trade is made up of companies that depend on the physical gathering of people for business.
In Friday trades, cruise stocks were down as much as 7%. Norwegian Cruise Line Holdings fell 7%, Royal Caribbean fell 5%, and Carnival dropped 5%.
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Airline stocks also moved lower, with the popular JETS ETF down as much as 4% in Friday trades. American Airlines fell 5%, Delta Air Lines fell 5%, United Airlines fell 5%, and Southwest Airlines fell 5%.
Casino stocks fell on Friday, with Las Vegas Sands down 2%, MGM Resorts down 4%, and Wynn Resorts down 3%.
Despite Friday’s decline, analysts including Fundstrat’s Tom Lee said they believe the reopening trade represents an opportunity for investors, as a potential vaccine can help the economy reopen quickly.
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