Retail sales for August rose 0.7%, far better than the expected drop of 0.8%. Two-thirds of the U.S. gross domestic product is made up of retail sales. Beating expectations is a positive outcome but it supports the idea of the Federal Reserve tapering its bond purchases.
Keep your eye on the bond market as it responds to this report. I’ve picked out two stocks with great upward trends despite the market fluctuations — and more in Thursday’s stock market recap.
But first…
Stock Market Recap
In this stock market recap, global stocks are mixed as China reported negative economic data while U.S. retail sales beat expectations.
Jobless claims rose slightly last week from 312,000 to 332,000. The recent wave of COVID-19 infections could be responsible for this uptick as it has slowed down other parts of the economy.
We are going to see more widespread trading action between the indexes in the near future. The S&P 500 has been cooling off. As long as we get slow movement as we pull back, without a parabolic move down, then the market can recover from fragmentation. Then I would say that things are set to move higher.
The Health Care and Communications sectors are looking strong. The Consumer Discretionary sector could move higher if it breaks the $185 level. The Financials sector has been moving lower recently because of the bond market’s uncertainty. Remember, if the bond market moves lower, interest rates move higher. And rising interest rates are bullish for Financials.
Roger’s Radar: 2 Stock With Strong Upward Trends
Motorola Solutions Inc. (NYSE: MSI) is in the Communications sector, which has pulled back recently and looks like it could bounce. MSI has a one-year return of 55.59%, and it has a five-year dividend growth of 83.92%. The stock is currently trading around $241, and I’d put a price target of $260 over the next quarter.
The second stock on my radar has been on a tear! It has a one-year return of 97.61%. A lot of people are putting money into private financial management firms. This company is a global alternative asset manager looking to grow its five-year return of 325.17%.
In this video, you’ll discover why retail sales are so important… what the bond market could do in the wake of that report… whether or not the market continues to be fragmented… what to expect from trading action Thursday… what sector is set to move in response to the bond market… and two stocks on my radar today.
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