Why are energy, transportation and finance stocks having a moment?

Stock Market

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2020 started a new trend in an increase in casual and non-professional traders. Many brokerages noted a big uptick in the number of new accounts being opened and first-time traders. An increase in volatility in the stock market meant that it was exciting with plenty of opportunities to profit. Trading has also become much more accessible as increased smartphone usage and internet access provided the perfect catalyst.

Interest in short-term trading has been particularly high, due to volatility and quickly changing markets. Short-term traders, otherwise known as day traders, are those that execute short-term, day-long trades. They may opt for several, or just a couple depending on their experience and the assets they have to hand. You can learn more about the pattern day trade rule on trading platforms.

So which sectors have performed well in recent months?

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Finance

The stocks of financial companies are doing well as many economies continue to pick up. The pandemic was initially predicted to result in widespread recession and while this has happened to some extent, recovery is expected to take place this year, and early 2022. This has led to increased confidence and interest in financial companies on the stock market. Lending, saving, trading, exchange, and investing are all on the up, therefore investor confidence is high. This drives forward stock prices of all the biggest names in the market.

Transport

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2020 was tough on transport. The pandemic put a halt to almost all international travel including planes, trains, cruises and ferries, buses, and even regular car journeys. Even shipping was impacted as big delays resulted from reduced transport links and problems with staff being allowed to work ‘in person’. But in 2021, as vaccine rollouts continued, the transport sector has opened up. Travel is now taking place between countries and people have much more freedom to move. There are fewer restrictions on working and travel, meaning many transport companies are experiencing a big increase in revenue.

Online shopping also experienced a boom during the pandemic which has continued even into this year. More people are using online shopping sites and therefore relying on delivery and logistics services. This combined with moderate oil and fuel prices creates a perfect scenario.

These are some of the reasons why the transport sector has boomed in the last month.

Energy

The need for energy has remained constant throughout 2020 and 2021. As we return to some semblance of normality, the requirement for energy is stabilizing. Of particular interest are sustainable and green energy-producing companies, as there is increasing pressure from environmentalists. The Paris Agreement and various other binding agreements have forced companies to commit to reducing their footprints. Furthermore, a recent court decision in the Netherlands has forced Shell to reduce its emissions by a significant amount.

As societies continue to open up and in the event of avoiding another lockdown, energy stocks are likely to continue to flourish.

These are just some of the key sectors of interest for the current moment although avid traders can also consider tourism and hospitality, technology, and entertainment as well!

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