Key Points
Carnival jumped 13.4% to $25.11 after posting record third-quarter revenue of $8.44 billion and all-time high net income of $1.9 billion.
The same morning, the Conference Board's Consumer Confidence Index plunged 6.7 points to 81.9, its lowest level since 2014 and far below the 89 economists expected.
Carnival said 2027 is already booked at record occupancy and record prices, and customer deposits hit a third-quarter record of $7.6 billion.
Fair Isaac (NYSE: FICO) plunged 26.5% after regulators added VantageScore to Fannie Mae and Freddie Mac's mortgage pricing grid.
Stocks slipped: the S&P 500 fell 0.2%, the Dow lost 0.3% and the Nasdaq dipped 0.1%. The 30-year Treasury yield hit its highest level since 2002.
How can Americans feel worse about their money than they have in 12 years... and still book cruises at record prices?
At 10 a.m., the Conference Board reported that its Consumer Confidence Index fell to 81.9 in September. That's the lowest reading since 2014. For the first time in the survey question's four-year history, more people said their personal finances were bad than good.
"References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights," said Dana Peterson, the Conference Board's chief economist.
Americans now expect inflation of 6.1% over the next year.
That should be terrible news for a company that sells vacations. But a few hours earlier, Carnival told a very different story.
The Best Quarter in Carnival's History
The numbers:
Revenue: a record $8.44 billion, up 3.5% from a year ago
Net income: an all-time high of $1.9 billion
Adjusted earnings: $1.43 per share, ahead of the $1.35 analysts expected
Net yields, the industry's key pricing measure, up 2.4%, more than a point better than the company's own June guidance
And Carnival did all of it while getting hammered by oil.
Carnival is the only major cruise line that doesn't hedge fuel. Its fuel bill jumped to $615 million in the quarter from $451 million a year earlier. The company said higher fuel prices and currency swings cost it about $131 million.
It still beat.
"We delivered another quarter of top and bottom-line records, with accelerating demand and even stronger cost discipline driving results ahead of our expectations," CEO Josh Weinstein said.
2027 Is Already Booked at Record Prices
The part that got investors' attention was what comes next.
"For full-year 2027, both booked occupancy and pricing are at record levels," Weinstein said. "Looking further ahead, 2028 is also off to an excellent start at higher occupancy and prices than last year."
Customer deposits, money people have already paid for future trips, hit a third-quarter record of $7.6 billion. That beat last year's record by $500 million, even though Carnival's capacity is flat.
Carnival also raised its full-year outlook. It now expects about $3.08 billion in adjusted net income, or roughly $2.24 per share. That's after absorbing an extra $150 million in fuel costs.
Carnival shares jumped 13.4% to close at $25.11. The stock had been trading near its 52-week low of $21.52. The rally lifted the whole cruise group. Royal Caribbean (NYSE: RCL) rose 7.5% and Norwegian Cruise Line (NYSE: NCLH) gained 3.4%.
This is the same split we saw last week when two earnings reports told very different stories about the American consumer. People are cutting back on a lot. They are not cutting back on everything.
The Bond Market Isn't Buying It
The 30-year Treasury yield climbed as high as 5.61% intraday, its highest level since 2002, before settling around 5.57%. The 10-year yield ended near 5.23%. According to the CME FedWatch Tool, traders now see a better than 72% chance that the Fed hikes again in October.
We've been calling this the 5% world. When the safest investment on Earth pays more than 5%, every stock has to justify its price.
The labor data didn't help. Job openings fell to 7.08 million in August, below the 7.2 million economists expected.
One bit of relief came from oil. After Bloomberg reported a release from the Strategic Petroleum Reserve, West Texas Intermediate crude fell 4% to settle at $88.94 a barrel, and Brent slid 2.6% to $102.56. Stocks still closed slightly lower, with the S&P 500 at 7,670.84.
The Day's Other Big Movers
Fair Isaac (NYSE: FICO) plunged 26.5% after Federal Housing Finance Agency Director Bill Pulte said Fannie and Freddie are moving to "ONE PRICING GRID" that includes rival VantageScore.
Iovance Biotherapeutics (NASDAQ: IOVA) soared 31.5% after raising its full-year revenue outlook to $410 million to $420 million, up from $350 million to $370 million.
Oracle (NYSE: ORCL) rose 3.9% after unveiling Fusion Claw, a new AI agent application for enterprises.
Summit Therapeutics (NASDAQ: SMMT) gained 5.9% after AstraZeneca agreed to invest $2 billion for a roughly 12% stake.
CarMax (NYSE: KMX) rose 4.7% after earning $1.16 per share, well ahead of the 73 cents analysts expected.
Out in San Francisco, OpenAI held its DevDay conference. It rolled out "always-on" AI agents called Dots and a new model, GPT-6.1 Sol. That comes one day after OpenAI scrapped the release of its GPT-6.1 Astra model over safety concerns.
What Lands Next
Wednesday: The Fed's preferred inflation gauge, the August PCE report, arrives before the open. After the close, Micron (NASDAQ: MU) reports fiscal fourth-quarter results. Analysts surveyed by LSEG expect $31.61 per share on $51.07 billion in revenue. Micron guided to a record gross margin of about 86%.
Not everyone is convinced those margins can last. Dylan recently explained why memory is one of the most cyclical businesses on Earth, and why he's watching China's capacity build closely.
Thursday: ISM manufacturing data, plus Nike (NYSE: NKE) earnings after the close.
Friday: The September jobs report. Early consensus calls for roughly 85,000 new jobs.
The consumer says one thing. Carnival's booking curve says another. This week's jobs report may tell us which one to believe.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
Found this helpful? Share it with others.