March’s employment report is released Friday and it should be a good one, but analyst say it will be the inflation data, interest rates and oil prices that could set the direction for markets in the week ahead.
Stocks closed out another positive week, despite a sharp move higher in bond yields, sparked by comments from Federal Reserve Chairman Jerome Powell that the Fed will be as aggressive as needed to tame inflation. Analysts say there is positive momentum in the stock market, at least in the near term, and they are watching the big cap growth stocks break higher.
But the course for stocks could be decided by other factors, including the price of oil. “It's just a barometer for those other things - the Ukraine conflict, inflation and the Fed," said one strategist.
Rising rates are also a concern, and the pickup in yields sent the benchmark 10-year Treasury yield as high as 2.5% by Friday. Investors are afraid the Fed will overplay its hand and end up slowing the economy.
According to a CNBC in depth report this weekend, an environment of slowing growth and higher rates could actually lead to more corporate spinoffs. Those spinoffs can provide big stock market gains, but investors need to be careful.
