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For Immediate Release
Chicago, IL – October 21, 2021 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Tips on Where to Invest as Rates Rise
Welcome to Episode #289 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Zacks Chief Equity Strategist, and economist, John Blank, joins the podcast to discuss the state of the economy, the Fed’s game plan and where you should invest if rates should rise sooner than expected.
Don’t Get Complacent About the Fed
The Federal Reserve has a statutory required dual mandate: full employment and inflation at 2% or under.
For years, the Street didn’t much care about the inflation component.
But in 2021, as inflation has soared due to the pandemic, it has suddenly come into play.
The Federal Reserve has been saying that inflation is transitory. But companies are now reporting third quarter results and there doesn’t appear to be any let up in the pricing pressures, and price increases, from companies.
With unemployment on its way towards the Fed’s target of full employment, which is 3.5%, it may have to address the inflation component sooner in 2022 than anticipated.
And that could mean increases in the Fed Fund’s rate.
The bond yields will start to rise well ahead of any actual raising, but what will it mean for the stock market if the 10-year jumps back over 2%?
Where to Invest for Higher Rates
According to John, REITs and utilities will get hammered in a higher Fed Fund’s rate environment.
Ditto for income stocks.
But banks, which have been mostly ignored for the last decade, will see rising earnings as the 10-year rises.
In such a scenario, investors should consider the “winners” in the category which include JPMorgan Chase JPM, Bank of America BAC and Goldman Sachs GS.
Big regional banks like PNC Financial PNC will also be beneficiaries.
Look for banks in quickly growth areas of the country like United Community Banks UCBI, which does business in the hot southeast region which is attracting new Millennial workers, new businesses and has some of the hottest home building markets.
What else should you know about investing in a rising rate environment?
Tune into this week’s podcast to find out.
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
United Community Banks, Inc. (UCBI) : Free Stock Analysis Report
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