While numerous economic data points come rolling in, cyclical stocks are taking center stage in the stock markets.

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As cyclical stocks generally flow with economic cycles and seeing that this is considered the Federal Reserve’s preferred inflation measure, investors will be watching it closely.  

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Thus, the latest weekly jobless claims figures, along with the latest personal consumption expenditure numbers, require consideration.

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CYCLICAL STOCKS EXPLAINED

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Simply put, a cyclical stock is a stock that’s affected by changes in the overall economy.   If the economy does well, consumers can afford to buy new cars, upgrade their homes, shop, and travel.  

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These are also some of the first discretionary expenses people cut when the economy does poorly.

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NOTE:  INVESTORS SHOULD BE MINDFUL OF CYCLICAL STOCKS BUT SHOULD NOT AVOID THEM ALTOGETHER.

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With the overwhelming focus on the economy today, cyclical stocks are most likely at the core too.

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TOP CYCLICAL STOCKS TO BUY (OR SELL) THIS WEEK

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APPLE (NASDAQ:AAPL)

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Apple is unmistakably not only one of the largest global tech companies but also one of the most valuable. The multinational tech company that offers premium products and services like Apple Music and Apple TV are used by millions.

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Last week, Bloomberg reported Apple’s acceleration to work on its EV car while refocussing the project to include self-driving capabilities.

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The company’s efforts could be a game-changer if successful, given how tech and auto giants have spent years on autonomous vehicles. However, these capabilities remain difficult.

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Moreover, last month the company also reported its fourth-quarter earnings delivering a record revenue of $83.4 billion. The company also launched its most impressive products ever during the quarter.

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The products include the iPhone 13 lineup and M1-powered Macs.

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PLUGPOWER INC. (NASDAQ:PLUG)

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The provider offers turnkey solutions for hydrogen fuel cell systems to replace the conventional batteries and equipment used in vehicles. The company’s technology is used by customers like Amazon and BMW.

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Fertiglobe has selected Plug Power to produce green hydrogen as feedstock for up to 90,000 tons of green ammonia production at EBIC in Egypt and will be one of the largest applications globally.

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On Tuesday, the company also announced that its acquisition of Applied Cryo Technologies. The company is a leading technology provider for the transportation, storage, and distribution of liquefied hydrogen and other cryogenic gases.

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CHEVRON CORPORATION (NYSE:CVX)

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One of the largest oil companies in the U.S. Chevron would arguably be in a prime position to benefit from a booming economy.

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And, as CVX stocks continue to trade towards pre-pandemic levels, analysts at RBC Capital Markets believe that the company’s petroleum-based offerings are worth looking at. The firm upgraded its rating of CVX stock from Perform to Outperform while raising its price target to $145.

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Due to the consistent need for fuel-based services against ongoing supply chain pressures, Chevron could also stand to gain in the current inflationary environment.

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The company also boasts an annual dividend yield of about 4.8% making it even more appealing for investors.  

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