Pay attention to the bond market as this week’s biggest economic reports will shed light on how supply bottlenecks, COVID-19 and the job situation is affecting inflation. The Federal Reserve clarified that a bond taper doesn’t mean an immediate interest rate hike — which lowered investors’ fears. I’ve picked out one bullish and one bearish stock to trade as we could see heightened volatility in the near term — and more in Monday’s stock market recap.
Stock Market Recap
In this stock market recap, global stocks are mostly higher as the Fed stated it will keep interest rates low in the near term.
Meanwhile, manufacturing, construction, goods and services and job data will impact the bond market directly.
The reason bonds are up is because of rising COVID-19 cases. However, the Fed is looking for a better job situation and keeping its eye on how much the rise in cases has slowed our economic recovery down — which are the biggest factors in ending bond purchases and raising rates.
The market is stretched out and continues to push to new highs. I would be cautious with tech stocks right now. This past week, I had my eye on the Health Care sector. But this week, the market looks more bullish. So I’m leaning toward the Industrials, Materials and Consumer Staples sectors. Keep your eye on the Energy sector, as it could break out.
Roger’s Radar: 1 Long and 1 Short Stock to Start the Week
O’Reilly Automotive Inc. (Nasdaq: ORLY) is one of the largest retailers for automotive aftermarket parts and supplies. The stock is pulling back to its 50-day moving average after a swing high and has a one-year return of 27.96%. ORLY could see a bounce to the $616 level.
The weak stock for today is also an automotive stock, but is involved in salvage vehicle auctions and related services. The market has been moving this year and this company has a one-year return of only 4.05%. Its 50-day MA moved below the 200-day MA and the stock made a new swing low recently, so this is a great short opportunity.
In this video, you’ll learn which S&P sector is ready for take off… which industry is plagued with setbacks… whether the Fed will take action on interest rates… the biggest reports this week that will shape market action… the top pullback stock
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Check back each morning for Roger’s Radar and the most important news and numbers in the WealthPress stock market recap.