Small- and medium-cap stocks have been trading sideways for months now. Large-cap stocks continue to be overbought and have been pushing the S&P 500 and Nasdaq to record levels for weeks. With earnings season upon us and fresh economic data hitting the newswire this week, large caps could experience a cooldown. I’ve identified two low-risk, low-volatility stocks with upside potential — and more in today’s stock market recap.
But first…
Stock Market Recap
In the stock market recap, global stocks are mostly higher as investors look ahead to earnings and economic reports.
European Central Bank President Christine Lagarde alerted investors of a monetary policy update ahead of the group’s July 22 meeting. Federal Reserve Chair Jerome Powell will speak on Wednesday and Thursday. Investors will closely monitor Powell’s statements for any changes in U.S. monetary policy.
The bond market has pulled back from its 200-day moving average and may start its decline to lower levels… especially if we see any news on interest rates rising by the end of summer. Higher interest rates mean lower margins for companies. This could also send tech stocks lower, as high future profits are currently priced into their valuation.
U.S. banks are set to kick off earnings season this week. Analysts expect another positive quarter as the economy has rebounded strongly. We should get a first glimpse of how companies have been faring in a post-pandemic environment.
Roger’s Radar: 2 Hot Small Caps With Recent Pullbacks
Box Inc. (NYSE: BOX) is a cloud-based product platform. It has a market cap of $4.08 billion. People are moving out of offices, which is driving an increased need for cloud-based products. BOX is currently trading around $24. I would ride this stock to $28 and get out if it drops below $24.
My second pick for today is an oil and gas company. This stock hit its 50-day moving average (MA) and is bouncing back up. It has a one-year return of 175.36%. I’m looking for it to keep pushing higher.
In today’s video, you’ll discover whether large caps have more upside momentum left… whether the bond market is going to rise or fall… why the fair value of large caps is distorted… the biggest Fed reports coming this week… how earnings will impact the tech sector… and two hot small-cap stock picks.
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So instead of trying to pick stocks in overbought markets and interest-rate sensitive sectors — try trading stocks that have a 10-year track record of moving higher during special primetime windows.
