Hey Influence Traders,
I had an amazing weekend.
Hope that you did too.
I pulled a #PowerMove and took my wife to Napa for her birthday … and with a new tool I’m rolling out, maybe I’ll see you there next time.
After our trip, airlines, rental car companies, restaurants and wineries are all winning.
My waistline and liver … losing!
Investors also took a hit this past week with Biden’s announcement that the capital gains tax rate is going to almost double.
We expect to see details this Wednesday.
We are going to dig deeply into Biden’s plan in the coming week.
The Power Moves Portfolio
Option Pit Director of Education Andrew Giovinazzi and I premiered our new Power Moves Portfolio at last week’s Option Pit Round Robin – we have combined forces to make you more money by connecting DC decision making and options trading.
Attendees at the mentoring event got the first peek. I’m partnering with Andrew to run a book of options trades based on the long-term spending trends that I identify in D.C.
I’ve identified a “Starting Lineup” of securities that Andrew will move into and take positions around.
Our first trade, Freeport-McMoRan Inc. (Ticker: FCX), is up 15% (Andrew bought 4 FCX Jun18 32 calls and sold 4 FCX May21 36 calls for a $3.20 debit).
Power Moves Portfolio has HUGE potential for you as the Biden infrastructure bill comes into focus.
Travel is Taking Off
I traveled throughout COVID.
There is nothing good to say about COVID, except that airline tickets were cheap, planes were empty, and cars and hotel rooms were easy to get.
Well, as Dylan said – the Times They are A-Changin … or they are changing back.
On this trip, flights were premium priced, planes were packed, rental cars were hard to find, and hotels are back to pre-COVID prices.
While the outlook for the airline industry is taking off, the outlook for the cruise industry is sinking.
The airports were as packed as the planes themselves, and I had to pay a premium for my tickets.
That increase in demand is causing airlines to add more staff and flights.
And while passenger traffic is still down 40% over 2019, a number of airlines have even predicted that they expect to turn a profit this summer.
Southwest Airlines Co. (Ticker: LUV) managed to turn a small profit in Q1 of this year and is planning on recalling 2,700 flight attendants by the start of summer.
Other U.S. carriers, such as Delta Air Lines (Ticker: DAL) and United Airlines (Ticker: UAL) lost money in the first quarter, but they are also gearing up for a busy summer season and expect to offer as many seats this July as they sold in July 2019.
Obviously, there are still many variables. The direction of the pandemic seems to change on a weekly basis and many countries still have travel bans in place.
But a number of airlines are telegraphing a belief that restrictions will list enough to allow full flights to European destinations.
Even if international travel does not pick up as expected, pent-up demand for U.S. domestic travel, as well as travel in the Americas, can more than make up demand.
While planes and hotels are filling up, and vacation rentals and car rental companies can’t meet demand, the outlook for cruise lines is not as buoyant.
A number of important cruise destinations, from Alaska to the Caribbean, are rethinking if they want to invite the pre-COVID cruise crowds back to their ports.
At the same time, the U.S. Centers for Disease Control and Prevention (CDC) have successfully been keeping ships from sailing by claiming that COVID can’t be contained on ships.
Cruise ships have been docked for more than a year – losing close to $50 billion in economic activity.
The CDC has issued a set of guidelines that cruise lines can implement to sail again, but those rules have been described by the industry as being “so burdensome and ambiguous that no clear path forward or timetable can be discerned.”
As a result of the industry’s push-back on the guidelines, the CDC has been dragging its feet in response to the industry’s concerns.
Senators Rick Scott and Marco Rubio of Florida, along with Sen. Dan Sullivan of Alaska, have introduced the Cruise Act Bill, which would require the CDC. to issue guidance allowing U.S. flagged carriers to start sailing again.
If cruising does not restart — and soon –,the ports of Miami and Ft. Lauderdale have a lot to lose.
Some cruise lines, such as Carnival Corp (Ticker: CCL), are considering moving their operations to Europe where sailing is allowed, but many of the routes will require that all passengers and crew be vaccinated.
The airline industry is ready to get passengers to cruise ships. Let’s see if the cruise industry can catch up.
Cutting Through the Noise for You,