Stronger economic data could power stocks that thrive in a rebound in the week ahead

Stronger economic data could power stocks that thrive in a rebound in the week ahead

A decline in new Covid infections, along with improving economic data and stimulus hopes, could boost stocks that flourish in a resurging economy in the week ahead.In the past week, expectations for a strong economic rebound helped boost interest rates. While the broader stock market was choppy, sectors that do well in a rebound - financials, airlines and industrials - stood out as leaders. This is known as the reflation trade.Those stocks gained at the expense of growth and technology, down 2%. Strategists expect that reflation trade to continue as signs suggest that the economy could make a sharp comeback.The S&P 500 was down 0.7% on the week to 3,906, while the Dow was up a tiny 0.1% at 31,494. The Nasdaq was off 1.57% for the week, to 13,874, with the decline in tech. Apple, for instance, gave up 4% on the week.

The big event in the week ahead is testimony from Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday and the House Financial Services Committee Wednesday. He is expected to discuss the increase in interest rates, as well as concerns that inflation could begin to take