The Russell 2000 is making multi-month highs. Small caps have a strong negative correlation to interest rates. And if bonds continue climbing, more buying may be triggered. I’ve identified two strong pullbacks in small caps that would benefit from a bond rally — and more in today’s stock market recap.
In today’s stock market recap, global stocks are mixed this morning as U.S. interest rates dip lower.
The bond market made a one-month high yesterday and continues to move up today. This means that interest rates are moving lower. The Nasdaq is breaking higher because tech stocks are the most sensitive to interest rate movements.
Japan’s economy contracted 1% versus the 1.3% expected. We may see the Japanese yen lose value if the Tokyo Olympics don’t go ahead as planned.
Investors await the Consumer Price Index report for May, scheduled to be released on Thursday. This will give us a glimpse of how much prices are rising for everyday goods. Economists are worried a large increase in prices would prompt the Federal Reserve to taper bond buying or allow the interest rates to rise.
Vista Outdoor Inc. (NYSE: VSTO) operates in the shooting sports and outdoor products segments. Gun and ammo sales have soared since the beginning of the COVID-19 pandemic. The outdoor products segment will benefit from Americans going outside and enjoying the summer.
VSTA has a one-year return of 288.17%. I’ve been bullish on this stock for a year and it has more upside potential. The stock recently experienced a pullback from the $45 level.
The second small-cap stock is also in the Russell 2000. It is a leader in products and solutions for home and workplace environments.
In today’s video, I’ll go over why I’m bullish on small caps and tech again… the big reports on the docket this week… whether Japan’s economy is heating up or cooling off… and the top picks for short-term, high-probability pullbacks.
Legendary trader Tom Busby just discovered something shocking about the stock market…
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Tom kept this strategy to himself for a year…
But now that he’s been able to prove his theory on real-money trades with gains like 90% on RIOT and 122% on MRNA, he’s ready to go public with it.
And retail investors stand to benefit most!
Check back each morning for Roger’s Radar and the most important news and numbers in the WealthPress stock market recap.