By Noreen Burke
Investing.com – The stock shake caused by the rapid rise in treasury yields looks set to continue to be a major focus for markets next week, especially if stronger economic data pushes treasury yields even higher. Investors will focus on Friday’s employment report, which is expected to show that restrictions on viruses have maintained job growth capacity in February. The statements of several Federal Reserve spokesmen, including President Jerome Powell, will also be closely monitored. The OPEC + coalition is expected to moderately increase oil production at its meeting on Thursday, with prices set at nearly 1
- Tug between stocks, rising bond yields
The shift to energy, financial and other stocks, which should benefit from economic opening, has accelerated, while the treasury’s rapidly rising returns are squeezing technology stocks, which have been leading to market gains for years.
Technical stocks are particularly sensitive to rising returns, as their value depends largely on future profits, which are discounted more deeply when interest rates rise.
The Fed, which sounds silly, along with expectations of more incentives are stimulating higher yields and fueling fears of inflation, and the two-way market looks set to continue, at least in the short team.
Meanwhile, the profit season is coming to an end, but traders will still report with Purpose (NYSE :), Kohl’s (NYSE 🙂 and Nordstrom (NYSE :), which will release data on Tuesday, followed by Costco (NASDAQ 🙂 on Thursday.
- Job report in February
With President Joe Biden’s $ 1.9 trillion package to alleviate the coronavirus on Friday, the February agricultural wage report will show how the labor market is recovering.
Government data late last week showed that initial unemployment claims had unexpectedly fallen to their three-month low, indicating that a slowdown in the level of infection is allowing the labor market to gain some strength. recovered in January.
Economists expect the US economy to create new jobs in February, following an increase of 49,000 in January. But winter storms covering the entire south can complicate the picture.
- Powell’s speech
With the treasury’s rising stock market rising rapidly, investors can hope the Fed’s staff can handle the sale to the state treasury.
Fed Chairman Jerome Powell will speak about the economy at an online event hosted by the Wall Street Journal on Thursday. So far, there have been no signs of concern among Fed employees about higher treasury yields.
Last week, Powell said the rise was the result of a stronger economy, but added that the pace of economic recovery has slowed in recent months, stressing again that monetary policy will remain easy for some time.
Other Fed officials who will appear include New York Federal President John Williams, Fed Governor Lael Brainard, Atlanta Fed President Rafael Bostic, San Francisco Fed President Mary Daly, Philadelphia Fed President Patrick Harker and Chicago Fed President Charles Evans.
- OPEC + meeting
As oil prices are 13 months, the OPEC + producers are expected to discuss the increase in production from April.
The Organization of the Petroleum Exporting Countries and Allies, known as OPEC +, cut production by 9.7 million barrels a day last year as the pandemic devastated global demand.
OPEC + sources believe that an increase in production of 500,000 bpd seems possible without stockpiling as economies recover.
Russia wants to increase supplies. The voluntary reduction of 1 million barrels per day in Saudi Arabia also expires in March, and this offer may return in April.
- United Kingdom budget, euro area data
In Britain, Finance Minister Rishi Sunak will promise more budget spending on Wednesday, but that could be the last piece of pandemic-related support he offers. The budget is expected to accumulate more loans on top of nearly £ 300 billion ($ 418 billion) than COVID spending and tax cuts.
The budget plan will be closely monitored, as it will be one of the biggest factors determining the pace of economic recovery.
In the eurozone, meanwhile, PMI data will show how the economy is progressing ahead of the European Central Bank meeting in March.
– Reuters contributed to this report