Monday morning’s markets will focus on the CPI (inflation) report tomorrow at 8:30 a.m. Despite investors expecting prices to rise, adding to already rising prices, Fed Chair Powell’s assurances of a rate cut limit bearish momentum.
The bond market does not correlate to Powell’s plans to cut interest rates this year. The 20+ year Treasury Bond (TLT) lost 3.41% last week and is down by 7.57% YTD. Income investors need to look at REITs for evidence that the market does not expect rates to fall. W.P. Carey (WPC) is range-bound at $55.27 - $58.00. Realty Income (O) trades at between $52 - $53.
In the energy sector, gas prices are soaring, especially in California. The average price at the pump is up by 23 cents to $5.27 per gallon. This is a seasonal spike. The scheduled maintenance occurs in May. Readers are discouraged from chasing the energy stock rally. Exxon (XOM) consolidated at $100 only weeks ago and closed at $121.37. Suncor (SU), SM Energy (SM), and Petrobras (PBR) are some of the energy firms to watch.
Watch bank stocks this week. JP Morgan (JPM), Wells Fargo (WFC), Citigroup (C), and BlackRock (BLK) will post quarterly results this Friday. They are widely expected to post strong results but could fall when investors “sell on the news.”
