Traders are worried about inflation after experiencing spikes in interest rates earlier this year. And there’s a growing number of stocks breaking down right now — and more in today’s stock market recap.
So it’s important to trade the right sectors as these have shifted… And I’ll go over my favorite sector to trade.
But first…
Stock Market Recap
In today’s stock market recap, global markets are mixed with U.S. markets trading lower.
The annual inflation rate rose 4.2% in April, which is the largest monthly increase since the 2008 financial crisis. This will add more stress to the markets and could make stocks choppy in the short term. The producer price index comes out Friday.
Remember that tech stocks are heavily valued on the expectations of future profits. Profits get sliced when high inflation is present. This is why the Nasdaq reacts swiftly to any inflationary news.
Momentum levels for the S&P 500 remain elevated because several sectors are in the index. The Nasdaq, however, has been cooling off and I expect it to fall even further before it regains momentum.
Roger’s Radar: My Favorite Sector Right Now
I like retail stocks right now as strong consumer spending has continued. Aside from today, Gap Inc. (NYSE: GPS) is trading strong through this volatile market. With stimulus money hitting bank accounts and the jobs market picking up, Americans are spending their money.
GPS has a one-year return of 391.21%, and has shown a strong upward trend since February. Gap operates around 3,100 stores and has about 615 franchise agreements around the world. I expect retail stocks to do well this summer as people travel and shop and eat out.
Make sure you watch today’s video to get more retail stocks I like, and see which ones to stay away from.
In today’s video, I’ll go over why there’s current selling pressure in the Technology sector… which sector you want to be in right now… whether momentum levels are increasing or decreasing… and how to take advantage of the stock market regardless of which direction it goes.
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