Cruise stocks were among the best performers in Monday’s midday action. A positive outlook presented by Bank of America CEO Brian Moynihan buoyed these stocks. Carnival (NYSE:CCL), Norwegian Cruise Line Holdings (NYSE:NCLH) and Royal Caribbean Cruises (NYSE:RCL) all posted gains of around 9%.
Meanwhile, analyst comments provided another significant boost. Grab Holdings (NASDAQ:GRAB) and WD-40 (NASDAQ:WDFC) climbed on separate upgrades.
On the other hand, Seagen (NASDAQ:SGEN) suffered a setback after reports of a delay in a potential deal to be acquired by Merck (NYSE:MRK).
Cruise Stocks, Grab Holdings and WD-40 Are Monday’s Winners
Cruise stocks got a significant boost in midday trading following upbeat comments from Bank of America CEO Brian Moynihan. After the Fourth of July weekend caused considerable turmoil in the travel industry, some experts wondered if more trouble is coming. However, Moynihan believes investors should not worry.
“Our U.S. consumer clients remained resilient with continued strong deposit balances and spending levels,” Moynihan said, pointing to the travel category as a source of strength.
Moynihan cited credit and debit card spending, which jumped 11% during the month. The CEO also doesn’t expect that spending to slow anytime soon. If this sentiment turns out to be accurate, it could mean an excellent season for the travel industry.
Travel spending has been steadily increasing for months. In May 2022, it reached a “new pandemic high” of $101 billion. The U.S. Travel Association says domestic leisure travel spending has “already surpassed pre-pandemic levels, even when adjusted for inflation.”
Cruise stocks have another thing helping them win as water travel is becoming more affordable. GoBankingRates reports that cruise lines have dramatically reduced prices in 2022, with some prices dropping as low as $100 per night.
Even as gas prices plummet and airlines smooth out operations, there’s no denying that cruising is more tempting than ever. If this trend continues, it could be the windfall cruise stocks need to offset some of their colossal pandemic losses.
Elsewhere, an analyst upgrade triggered gains in Grab Holdings. Shares of the Singapore-based super app, which provides transport, delivery and digital payment services, gained more than 12%. JP Morgan raised its rating from neutral to overweight.
“Grab’s superior regional super-app platform is best geared to rising online consumption in ASEAN, in our view,” citing a solid track of profitability.
Another positive comment prompted buying interest in WD-40, which rose 5% following an upgrade from DA Davidson. The company raised its rating to Buy from Neutral, highlighting its long-term growth potential.
Seagen is Monday’s Loser
Seagen fell nearly 5% on reports that a potential takeover by drug manufacturing giant Merck hit a speed bump. Although the talks remain on track, the Wall Street Journal said the process could take longer than previously thought.
Earlier in July, WSJ reported that the companies were trying to reach an agreement before Merck releases its quarterly results on July 28. However, according to the journal, the schedule has been pushed back, partly to allow time to receive data from a study of one of Seagen’s cancer treatments.
Merck’s plans to complete its acquisition of Seagen will likely be delayed until the company releases its next financial report in late July.
Merck’s acquisition of Seagen aims to strengthen the company’s oncology portfolio. It will give Merck additional revenue streams beyond relying heavily on its successful checkpoint inhibitor, Keytruda. Seagen’s expertise is in antibody-drug conjugates, an area in which Merck does not invest as heavily. The two companies have previously collaborated together to develop ladiratuzumab vedotin, a cancer treatment. When Merck and Seagen signed this deal, Merck took a $1 billion stake in the company.
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