Who would have it thunk? Abbott Laboratories‘ (NYSE: ABT) “Quick, $ 5, 15-minute, easy-to-use COVID-19 test” is music for stock investors – and cruise stock investors in particular are applauding.
This morning, pharmaceutical giant Abbott announced that the FDA has granted emergency use authorization to healthcare providers to use its new “fast, reliable, highly portable and affordable” on-site test for the novel coronavirus. In just 15 minutes, the test can tell you if you’ve contracted the novel coronavirus – and deliver the results straight to your iPhone or Android phone.
Actions of Royal Caribbean Cruises (NYSE: RCL) the stock is up 4.8% in response to 10:30 a.m. EDT. Carnival Corporation (NYSE: CCL) is up 5.7%, and Norwegian Cruise Line Holdings (NASDAQ: NCLH) equities gained 6.7%.
Abbott says it can produce 50 million of these tests per month, enough to cover the United States with accurate diagnoses in about six or seven months – and increase Abbott’s test revenue by $ 3 billion per year. But why good news for Abbott awesome any news for cruise stocks?
Basically, the reasoning is this: People are afraid to go on a cruise because they won’t know if the person standing next to them on the gangway could be infected with COVID-19. This depresses cruise demand.
Worse, however, fears that even a COVID-positive passenger could be aboard a cruise liner has seen the CDC ban all cruise ship crossings from U.S. ports for most of this year already.
But if there is a reliable test for the coronavirus available – a cheap, accurate and, most importantly, fast test – then much of this fear may go away. It is even possible that the CDC’s no-navigation order will disappear and previously announced bans on cruise lines doing business will be lifted, or at least not extended beyond the end of next month.
That is, in a nutshell, why stocks at Royal Caribbean, Carnival Corporation, and Norwegian Cruise Line are all increasing today.