A strong jobs report suggests an economy heating up in July. While the news is positive for the economy, stocks benefiting from positive future valuations and low interest rates could suffer from any Federal Reserve adjustments in stimulus. With COVID-19 present and spreading, the short-term future is still unclear. So I’ve focused on three low-risk pullbacks to trade through this uncertainty — and more in today’s stock market recap.
Stock Market Recap
In today’s stock market recap, global stocks are mixed after a strong jobs report increased the likelihood the Federal Reserve will taper its stimulus efforts.
Analysts expected 900,000 jobs added in July, and an unemployment rate of 5.7%. Friday’s jobs report showed 943,000 jobs added and a drop in the unemployment rate to 5.4%.
In line with other inflation indicators, the economy has rebounded from the pandemic slowdown. The Fed had already mentioned tapering its bond purchasing program earlier this summer. Rising COVID-19 cases have interfered with the timeline for dialing back stimulus. Government restrictions could complicate the economic recovery… increasing the need to continue fueling the economy in the form of bond purchasing and low interest rates.
Roger’s Radar: Top 3 Pullbacks
Roku Inc. (Nasdaq: ROKU) was a strong stay-at-home stock in 2020 and has moved higher the past month. The stock has pulled back for six straight days to its 50-day moving average. Call option prices are usually deflated around the 50-day MA after six or seven days of moving lower.
The second stock I’ve identified designs and manufactures vehicle components. The car industry is hot right now and this stock pulled back from a recent swing high. The third stock is a medical device company also pulling back with an earnings-per-share growth of 69.97% year over year.
In today’s video, you’ll learn why this Fed data is vitally important… whether stocks are ready to soar or drop… which sectors are fragmented the most… and which stocks to buy right now.
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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.