To get things started, cyclical stocks are those that are closely tied to the performance of the overall economy. These types of stocks are typically found in industries that experience ups and downs based on economic conditions. Automotive, construction and travel are some examples of cyclical industries. When the economy is growing, these industries tend to do well and their stock prices will typically rise. However, when the economy is in a downturn, these industries tend to suffer and their stock prices will typically fall.
It is important for investors to be aware of these economic cycles and the industries tied to them when considering cyclical stocks. During times of economic growth, it can be a good idea to invest in cyclical stocks as they have the potential for strong returns. Though, during economic downturns, it may be wise to avoid or reduce investments in these types of stocks. Taking that into consideration, here are two cyclical stocks to watch in the stock market this week.
Cyclical Stocks To Buy [Or Avoid] Right Now
JP Morgan Chase & Co. (JPM Stock)
First up, JP Morgan Chase & Co. (JPM) is a global financial services firm. The company provides a wide range of financial products and services to consumers, businesses, and governments. They are known for their investment banking, financial transaction processing, asset management, and private equity services.
Just this month, JP Morgan Chase & Co. announced financial results for the fourth quarter of 2022. In detail, the company posted Q4 2022 earnings per share of $3.57 and revenue of $47.4 billion. These figures are higher than what analysts’ predicted with estimates of $3.11 per share and $34.2 billion in revenue. Additionally, the company’s revenue had grown by 54.6% compared to the same period the previous year.
Over the last trading week, JPM stock has dropped by 4.37%. Though, looking at the past six months, shares of JPM stock are up 17.17%. Meanwhile, as of Monday morning, JPM stock opened slightly green on the day at $135.10 a share.
Yum! Brands (YUM Stock)
Next, Yum! Brands Inc. (YUM) is a global fast-food company. In short, the company owns and operates some of the world’s most popular restaurant brands, including KFC, Pizza Hut, and Taco Bell. They have a wide presence in over 150 countries, making them one of the largest fast-food companies globally.
This month the company announced that in December 2022, Yum! Brands Inc. received recognition for its sustainability efforts. They earned an A- grade in water security and a B in all other categories from CDP, an organization that evaluates companies on their environmental impact. Furthermore, the company was included in the 2022 Dow Jones Sustainability Index North America, marking its sixth consecutive year on the list which recognizes companies for their long-term economic, environmental, and social performance.
In the last five trading days, shares of YUM stock have pulled back by 2.83%. This comes after the company’s stock has gained 8.18% over the last six months. Moving along, on Monday morning, shares of YUM stock opened slightly red on the day by 0.12% at $126.48 a share.