The S&P 500 looks strong right now. But once you take market capitalization and its equal-weighted fund into account, the index is actually neutral. Large caps are grossly overbought and the market is fragmented. So I’ve identified four pullback stocks showing great upside potential — and more in today’s stock market recap.
Stock Market Recap
In the stock market recap, global stocks are mixed after U.S. markets experienced losses on Thursday and as COVID-19 cases surge around the world.
COVID-19 outbreaks in Asia are raising worries that new variants could cause similar spikes in other parts of the world. Pandemic restrictions have been reimposed in some countries as fears escalate that economic recoveries may be dampened. There are several low-vaccinated regions in the U.S. that could experience an uptick in cases if the variants continue to spread.
Large caps are overbought, but could cool off in the near future. When they do, we will see a rise in “boring stocks” in the Industrials and Materials sectors. The Information Technology and Consumer Discretionary sectors tend to have similar performance. On a cumulative basis, this has not been the case — and a big red flag. This means the markets are fragmented.
The bond market is hovering around it’s 200-day moving average. If COVID-19 cases in the U.S don’t surge, the bond market is likely to drop. In that case I would place bearish trades on the iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT).
Roger’s Radar: 4 Small Caps With Pullbacks
Simply Good Foods Co. (Nasdaq: SMPL) is a consumer packaged food and beverage company. It’s interest-rate neutral, which is important as we near the end of the summer. Food prices are higher, so it’s also inflation friendly. SMPL has been on a strong upward trend since March and will look to bounce back higher.
Other stocks on my radar include a social media listings and analytics company with a one-year return of 210.64% and technology company providing cloud-based analytics. I’m bullish on commodities right now and the fourth stock I picked today is an oil and gas company. Check out the video to see this last stock with a one-year return of 358.50%!
In this video, you’ll discover what today’s Federal Reserve data is expected to show… whether the bond market will bounce off its 200-day moving average… whether large-cap tech is prime for a rally or a correction… an update on the global economy… and four hot pullback stocks.
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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.