The hantavirus stock shock

What was supposed to be a dream vacation turned into a nightmare for the roughly 150 passengers aboard the Hondius, a Dutch cruise ship that has become the hub of a deadly hantavirus outbreak.

Three deaths, and eight cases overall, have been reported on the ship, according to the World Health Organization. Health authorities are acting quickly to trace and contain the outbreak, tracking down passengers who have already disembarked.

As early headlines about the disease unfold in real time, investors are assessing the market implications. So far, the outbreak has triggered short-term speculative moves, but investors don’t view it as the same sort of broad threat that Covid-19 was.

A shot to the arm

Moderna jumped about 10% yesterday morning on the news that the company is developing a vaccine for hantavirus—work which had begun before the outbreak. But by the end of the day, the stock had pared its gains, thanks to an Evercore note that dampened investor enthusiasm.

“We see no meaningful revenue opportunity,” Evercore analysts wrote. The reason, they explained, is because hantavirus is a “structurally small market” and Moderna’s vaccine for the disease is in an early stage.

Moderna popped 11.97% again today, creating yet more whiplash. But the surge is also related to the company announcing a positive Phase 3 study related to its seasonal flu vaccine in development, which isn’t related to its hantavirus research.

Cruise stocks are sinking

The hit to cruise stocks, however, may be longer lasting, given that the international news isn’t exactly great PR for sea adventures.

Royal Caribbean ended the day down 2.06%, Carnival fell 2.3%, Norwegian Cruise Line Holdings dipped 0.81%, and Viking Holdings declined 1.62%.

The hantavirus outbreak comes in an already rough year for the cruise industry, which has been battered by surging fuel prices and lower demand during the Iran war, since geopolitical chaos doesn’t exactly inspire more international travel.

The market shrugs it off

Perhaps what’s most surprising is the extent to which the broader market hasn’t interpreted the outbreak as a systemic risk. In March 2020, the Dow crashed about 26% in just four days as investors went from wary to full panic-mode.

But experts emphasize that while the situation is still unfolding, there’s no reason to sound the alarm bells. “This is not the start of a Covid pandemic,” said Dr. Maria Van Kerkhove, an infectious disease expert, at a WHO press conference.

The market agrees, for now.—LB