The market is moving higher on Tuesday and travel and entertainment stocks are among the biggest movers. After weeks of fears about the impact of the omicron variant of COVID-19, investors are now brushing it aside.
The most notable movers were Melco Resorts (NASDAQ: MLCO), Expedia Group (NASDAQ: EXPE), and Ashford Hospitality Trust (NYSE: AHT), all jumping double-digits at their high today. Booking Holdings (NASDAQ: BKNG), Marriott International (NASDAQ: MAR), MGM Resorts (NYSE: MGM), and Trip.com (NASDAQ: TCOM) were also up high single digits today.
|Company||Percent Move at High||Percent Move at Close|
|Ashford Hospitality Trust||12.4%||9.1%|
Data source: Google Finance.
Omicron continues to spread around the U.S., with the strain now accounting for 73% of new cases, according to the Centers for Disease Control and Prevention. And health officials are doing everything they can to ease the economic pain, from pushing more boosters to offering more at-home tests.
Image source: Getty Images.
The fear for weeks has been that lockdowns were inevitable to slow the spread of omicron, but the market seems to be thinking that won’t happen, at least in the U.S. Not only are businesses tired of shutting down, but consumers are tired of being on lockdown, as evidenced by record gambling levels in Las Vegas over the last few months.
Travel and leisure stocks are moving higher in lockstep because investors are bullish that there isn’t going to be a big disruption on the horizon. Analysts seem to be on board with that view given that Goldman Sachs, UBS, and Cowen all picked travel stocks to soar in 2022.
If you’ve been watching travel stocks over the last few weeks, you’ve seen a volatile ride as investors price in lockdowns or weaker travel and then get more bullish the next day. If the last few months are any indication, there will at least be a large percentage of people willing to travel and go to hotels and casinos, keeping them busy even as omicron spreads.
The most bullish scenario is that once omicron is past its peak we will be through the worst of the pandemic. The world has been through variant after variant with no end to the pandemic in sight. Government officials don’t seem to be willing to enact more lockdowns and people now have more choices and knowledge about how to avoid risks if they choose to. Investors are betting that in time that will leave the world in a more “normal” place, which could lead to a boom in travel over the next few years.
10 stocks we like better than Melco Resorts & Entertainment
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Melco Resorts & Entertainment wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of December 16, 2021
Travis Hoium owns MGM Resorts International. The Motley Fool owns and recommends Booking Holdings. The Motley Fool recommends Marriott International and recommends the following options: long January 2023 $115 calls on Marriott International. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.