There’s a big connection between energy prices and travel stocks, both of which have been rising recently as people rotate out of tech stocks.
First… Let’s talk oil prices, which have soared since the pandemic lows when the broader stock market crashed from February into March 2020.
In fact, things were so bad, oil prices briefly went negative.
And then they bottomed before ripping higher — about a ten-fold increase in prices over the past 11 to 12 months. And that is a huge move for a global commodity like oil.
This big move is also one of the reasons we’re starting to see inflation show up. And it’s not just oil… We’re starting to see things like soybeans, corn, wheat — so on and so forth — make upward moves.
So energy and commodity prices have been ripping higher, which has caused an uptick in inflation… and an adverse effect on travel stocks recently.
So travel stocks, for the most part, have been severely beaten down since the coronavirus pandemic. And that’s for an obvious reason — because people haven’t been traveling!
Just look at American Airlines Group Inc.’s (Nasdaq: AAL) stock chart over the past year. It went from around $30 a share just before the crash down to a bottom around $9 in early April 2020. It made a nice run up starting in November but this past week, we had another big sell-off. That’s because people began to worry about the increase in energy prices and how that affects travel stocks.
We also saw a big reversal in cruise line names. So does this mean rising energy prices could crush travel stocks’ momentum?
Check out my short video and let’s talk about energy prices and travel stocks, and what comes next. Also share your thoughts in the comments below, and let us know what you’re buying right now in the energy and travel stocks sectors.
And as always, please like and subscribe to our YouTube channel. You can also follow me on Twitter, and read more of my thoughts on the market at WealthPress and on Forbes, where I’m also a contributor.
What do an 83% stock price dip, dividend cuts and a mountain of debt have in common?
They were all bad news headlines about Apache Corp. in April 2020.
So with those awful headlines, how did ex-hedge fund manager Lance Ippolito know to buy in at that time…
And walk away with a 157% return just over a month later?