Energy Stocks, Tesla Split, Travel Industry: 3 Things to Watch By

© Reuters.

By Sam Boughedda

– Stocks closed higher in the U.S. on Monday after a late-afternoon surge in tech helped lift all three indexes.

It was a change from earlier in the day when stocks weren’t showing any momentum and oil prices plunged. Russia’s war on Ukraine continued though there were discussions about peace talks sometime this week.

One catalyst was Tesla, which announced plans to split shares if shareholders approve.

It’s a data-heavy week coming up, with fresh information on the state of the housing and job markets, including the much-watched monthly jobs report due out Friday. The data comes as the Federal Reserve mulls whether to move more aggressively on interest rates at its May meeting.

The focus on the Fed’s action has weighed on financials and pushed the benchmark 10-year Treasury to above 2.5%. Reuters reported that one measure of the U.S. bond yield curve - the gap between five and 30-year Treasury yields - inverted for the first time since 2006 signaling rising concerns over economic growth.

Oil fell after China imposed lockdowns on Shanghai after an outbreak of Covid-19 infections there. 

Here are three things that could affect markets tomorrow:

1. Energy stocks

Shares of energy stocks have fallen on new concerns regarding demand from China. Shanghai has started a two-stage lockdown to curb a further spread of the coronavirus.

The first phase is for five days, starting Monday, and is limited to Shanghai’s Pudong financial district and nearby neighborhoods. The second stage is a five-day lockdown, starting Friday, that will target Shanghai's downtown area.

The move should also put pressure on oil majors such as Exxon Mobil Corp. (NYSE:XOM), Occidental Petroleum (NYSE:OXY), Chevron Corp. (NYSE:CVX), and BP PLC ADR (NYSE:BP).

2. Tesla stock split

Tesla Inc (NASDAQ:TSLA) will be watched as it makes plans to increase the number of additional shares to enable a stock split. It joins other big companies such as Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) in splitting shares.

3. Travel stocks

Carnival (NYSE:CCL) and Norwegian cruise shares rose sharply even as pandemic lockdowns returned to focus after Shanghai initiated its most restrictive lockdown in two years following a surge in cases. Analysts have been watching the travel sector for signs of a spring thaw.

--Reuters contributed to this report

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