Stock markets will turn their attention to two critical economic reports released this week.
The Bureau of Labor Statistics will post the non-farm payroll report on February 11. Two days later, it releases the inflation (consumer price index) report. In anticipation of the data, the U.S. Treasury bond (TLT) slumped. TLT stock traded in a narrow range of $86.50 - $88.50.
Instead of holding U.S. debt, investors bought financial services firms like JPMorgan Chase (JPM). JPM stock gained over 5%, while Bank of America (BAC) added 6.3%. The rebound suggests that stock markets expect the economy to be growing. Despite the JOLTs (job openings) data indicating fewer positions, the economy is not weakening.
In the farm and construction machinery sector, for example, shares of Caterpillar (CAT) and Deere (DE) trade near their yearly highs. Agricultural activities are in a growth phase.
Markets are not concerned about the CPI report. Last week, the Dow Jones (DJI) closed at a milestone of above 50,000 for the first time.
Consumers are not cutting back on beverages and food amid higher total inflation. Last week, Pepsi (PEP) broke out after it posted results. It gained 10.97% to close at a 52-week high. Cash flow is healthy enough that management hiked its annual dividend by 4%. PEP stock pays $5.92 a share for a forward yield of 3.47%.
Your Takeaway
Neither of the economic reports will trouble stock markets this week.
