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Friday Dec.27, 2019
Carnival's sea-sick stock
_When you crash 2 of your own ships into each other, and the stock is still up_
Hey Snackers,
Still breaking in that sweater, socks, and probably-bought-at-an-airport book you didn’t ask for?
Stocks kept the Santa Rally alive on word Fitbit and Amazon Echo sales dominated stockings this Christmas.
Cruise
Carnival stock jumps despite a stormy 2019 (numbers can change the tides)
If two Carnival ships collide in a Mexican port... the stock still jumps 9% because Carnival reported strong earnings literally as that accident was unfolding. It's been a rough year for the cruiseliner — Case(s) in point:
- Natural Disaster: Hurricane Dorian, one of the most powerful hurricanes ever recorded, made many cruises not happen.
- Geopolitics: President Trump reinstated the Cuba travel ban, while unstable politics in the Arabian Gulf limited Carnival's sailing latitude.
- Reputation Sinkers: That memed-about collision between a pair of Carnival ships last week looks bad. So is having to cancel 8 cruise sailings after new ships were delayed.
- Euro Downturn: As the European economy limps along with low growth rates, Carnival sales struggle — Europeans make up a hefty 30% of Carnival's business, and they don't splurge on cruises when their "European carryall" purses are hurting.
Does this mean the buffet is still open?... While Carnival didn't have 2019 under (cruise) control, the stock inched up 3% this year. Plus, just this week in time for the holidays, analysts optimistically raised their price targets for 2020, thinking Carnival shares can cruise higher.
Show me the money... At the end of the day, a company's present and future profitability matter most. Carnival didn't have much control over the issues it faced this year (except for that fender bender). While Carnival's global sales have lagged, its critical North American revenues have risen consistently without life vests (and the numbers below make up about over 50% of Carnival's sales):
- $8B in 2016
- $9B in 2017
- $10B in 2018
Milestone
Nasdaq hits 9,000 for 1st time ever — Let us re-introduce what the "Nasdaq" is today
Congrats on the arbitrary milestone... One of America's 3 big stock indexes, the Nasdaq, just hit the round number of 9,000 points. The Dow Jones Industrial Average and S&P 500 both aim to represent a broad industry range of US stocks — but Nasdaq is more of a tech index. And it's unique:
- Nasdaq is both an index and a stock exchange, rivalling the New York Stock Exchange).
- It reflects the performance of 3,000 mostly tech, growth-focused stocks.
- So we wrote a whole article for you defining Nasdaq here.
The times, they are a-changing... The NYSE was founded way back in 1792, when brokers got together under a tree on Wall Street. The Nasdaq exchange was founded in 1971, claiming to be more efficient than NYSE because it used computers to trade, not huge dudes who had retired from college football/lacrosse.
- The Nasdaq OGs: Microsoft, Apple, Amazon, and even Starbucks chose Nasdaq to prove that computers at Nasdaq's human-less trading floor can execute stock transactions.
- The NYSE Blue Chips: Exxon Mobil, General Electric, Ford, and JP Morgan Chase proudly visit their home trading floor on Wall Street where pieces of paper (representing stock orders) used to be exchanged by hand.
There's hardly any difference between NYSE & Nasdaq anymore... Both exchanges give the same key benefits: Companies can sell stock to public investors, then public investors can buy that stock. That's why some tech companies list on the NYSE (like Uber) and some non-tech companies go Nasdaq (Lululemon surged 91% on Nasdaq this year). Here are today's main differences:
- Nasdaq charges companies lower fees to list their stock.
- NYSE brings the nostalgia of old (picture ringing that iconic ringing bell).
- NYSE is an auction market, like eBay for stocks: you do business directly with the person who's selling to you, and the highest bidder wins.
- Nasdaq is a dealer's market, like an Expedia for stocks: middlemen facilitate your transaction through an electronic network with millions of prices posted.
What else we’re Snackin’
- Cryptic: YouTube has allegedly been removing cryptocurreny-related videos as 'harmful or dangerous content'
- Resolutions: PayPal's CFO reveals the payment processor is looking to splurge on more $1B-$3B fintech acquisitions in the New Year
- Shiny: Tiffany's announces its holiday sales jumped as much as 3% from last year thanks to more love from mainland China buyers
- Down & Out: Nissan shares hit an 8-year low after another top exec dips out
- Wiki-Ban: Turkey's highest court rules that the government's 2-year ban on Wikipedia is a violation of freedom of expression (Turkey blocked your go-to "what-is-this" site in April 2017)
- Jammin': Why concert tickets are so pricey these days
Friday
- Wall Street's last Friday of the decade
Disclosure: Authors of this Snacks own shares of Amazon, Uber, and Lululemon
ID: 1045136
