Stocks that do well when the economy improves could continue to move higher at the expense of tech and growth in the week ahead, if market focus remains on better data and stimulus.
The big event for markets in the week ahead is testimony from Federal Reserve Chairman Jerome Powell, who speaks before Congress on the state of the economy Tuesday and Wednesday. Investors say he will commit to continue the Fed's easy policy, support more fiscal stimulus but perhaps sound more positive on the economy.
QMA strategist Ed Keon says there are signs the economy is going to "boom" possibly in the second quarter, sooner than many expect. The markets will be especially watching for any comments on inflation or rising interest rates, after the benchmark 10-year Treasury yield continued its rapid climb, hitting a fresh 1-year high of 1.36% in the past week.
Data includes the Fed's preferred inflation gauge the PCE deflator on Friday, and there is also durable goods. The reflation trade is expected to continue, with investors favoring the cyclical stocks that benefit from an improving economy.
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