Morning Bell: Cyclical Stocks and the Stimulus Bill

Kenny Polcari, managing partner at Kace Capital Advisors, discusses the latest stock market news including cyclical stocks, the stimulus bill and markets next week.
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Stocks are fluctuating as Treasury yields spike Friday. The five things you must know in the stock market Friday include Novavax's  (NVAX) - Get Report COVID-19 vaccine candidate, Coupang's  (CPNG) - Get Report market debut, stock futures were mixed, Ulta Beauty  (ULTA) - Get Report is falling and a look at the U.S. economic calendar.

Get a sneak peek of the new TheStreet video series Coffee with Katherine starring TheStreet reporter Katherine Ross.

TheStreet's Katherine Ross and Kace Capital's Kenny Polcari discussed breaking news in the stock market. Polcari spoke about cyclical stocks, what investors should watch with the stimulus bill, and how to approach the stock market next week.

Cyclical Stocks

Polcari said if the European Central Bank is able to succeed in capping yields at 1.5% then the stock market will take off and money will move into the growth stocks once again. "But I don't think that will happen, I think rates are still going to rise, they will be at 2% at the end of the year. That's ok because the market will adjust and the value cyclical trade will remain alive and well."

Stimulus Checks

President Joe Biden signed his coronavirus relief bill a day earlier than expected on Thursday. Stimulus checks of $1,400 for millions of Americans could begin rolling out as soon as this weekend, according to the White House.

Polcari said younger people receiving the $1,400 stimulus checks will likely invest the money in high-flying growth stocks to make a killing. He also emphasized that the people putting their stimulus checks into the stock market are those who most likely don't need the money to put food on the table or pay rent. 

Markets Next Week

Polcari said he will be watching macroeconomic data next week starting with the FOMC rate decision. "The market will listen very intently to what the Fed says and what are their underlying concerns are."

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