Investing.com-The stock market turmoil caused by the rapid rise in U.S. Treasury yields seems to continue to be the main focus of the market next week, especially as strong economic data pushes U.S. Treasury yields higher. Investors will pay attention to Friday’s employment report, which is expected to show that virus restrictions have limited employment growth in February. The appearance of several Fed spokespersons, including Chairman Jerome Powell (Jerome Powell), will also be closely watched. The OPEC+ alliance is expected to moderately increase oil production at the meeting on Thursday, with prices approaching a 1
- Tug of war between stocks, bond yields rise
Benefiting from the economic reopening of energy, the conversion of financial and other stocks has accelerated, and the rapid rise in U.S. Treasury yields is oppressing technology stocks that have led the market for many years.
Technology stocks are particularly sensitive to rising yields, because their value largely depends on future earnings, and when interest rates rise, earnings will be more deeply discounted.
The Fed’s moderate dovish performance and expectations of more stimulus measures have pushed up yields and raised concerns about inflation. The two-track market seems to continue, at least in the short-term team.
At the same time, the peak revenue season is coming to an end, but retailers will still report, aims (NYSE:), Kohl (NYSE:) and Nordstrom (NYSE:) will release data on Tuesday, followed by Costco (NASDAQ:).
- February work report
Last Friday, US President Joe Biden (Joe Biden) released a $1.9 trillion coronavirus rescue plan. The report showed the recovery of the labor market.
Government data late last week showed that the number of initial jobless claims unexpectedly dropped to the lowest level in three months, indicating that the decline in the infection rate is making the labor market attractive. Retail sales also rebounded in January.
Economists predict that after an increase of 49,000 in January, the US economy will create new jobs in February. But the winter storms sweeping the south may complicate the situation.
- Powell speech
With the rapid rise in U.S. Treasury bond yields and the stock market turbulence, investors may hope that Fed officials will solve the problem of selling U.S. Treasury bonds.
Fed Chairman Jerome Powell will talk about the economy at an online event hosted by the Wall Street Journal on Thursday. So far, there are few signs that Fed officials are concerned about rising Treasury yields.
Powell said last week that the economic strength is the result of a stronger economy, but he added that the economic recovery has slowed in recent months and reiterated that monetary policy will remain loose for some time to come.
Other Fed officials preparing to appear include New York Fed Chairman John Williams, Fed Governor Lyle Brainard, Atlanta Fed Chairman Rafael Bostic, San Francisco Fed Chairman Mary Daley, and Philadelphia Fed Chairman Patrick Hack and Chicago Fed President Charles Evans.
As oil prices are at a 13-month high, it is expected that the OPEC + oil-producing countries meeting on Thursday will discuss increasing production from April.
As the pandemic ravages global demand, last year, the Organization of the Petroleum Exporting Countries (OPEC+) cut 9.7 million barrels of production per day.
OPEC+ sources believe that as the economy recovers, oil-exporting countries’ production is expected to increase by 500,000 bpd without causing an increase in inventories.
Russia is eager to increase supply. Saudi Arabia’s voluntary production cut of 1 million barrels per day will also expire in March, and supply may be restored from April.
- UK budget, Eurozone data
In the UK, Finance Minister Rishi Sunak (Rishi Sunak) will promise to increase budgetary spending on Wednesday, but this may be his last pandemic-related support. The budget is expected to add more borrowing on top of nearly 300 billion pounds ($418 billion) in COVID spending and tax cuts.
The budget plan will be closely watched because it will become one of the biggest factors determining the pace of economic recovery.
At the same time, in the Eurozone, data on PMI will show the economic conditions before the European Central Bank’s March meeting.
-Reuters contributed to this report