Investing Topics: Interest Rates

Utilities Bob as Macro Conditions Change

By Roger S. Conrad on Mar. 21, 2017

The Dow Jones Utility Average has returned more than 10 percent since early December 2016, outperforming the S&P 500 by a few percentage points. It’s now reached valuations where the risk-reward balance skews to the downside. In this environment, investors should evaluate the macro forces that could bat these stocks about in coming months.

Rising Rates: Buy Financials and Value

By Elliott H. Gue on Feb. 14, 2017

The implications of the US economy moving into a period of stronger growth, faster inflation and rising rates shouldn’t be overlooked. And neither should the newest addition to the portfolio, an addition whose business goes from headwind to tailwind in this new environment.

Income Investors: Don’t Fear the Fed

By Roger S. Conrad on Jan. 28, 2017

When the Federal Reserve starts to tighten monetary policy, the financial industry dusts off stories about how rising rates are bad for dividend-paying stocks. But past data tell a different story.

Crystal Ball 2017

By Elliott H. Gue on Dec. 28, 2016

We review our 2016 forecasts and look at the out-of-consensus calls and market trends likely to generate market moves and profit in 2017.

Time to Buy Banks

By Elliott H. Gue on Dec. 23, 2016

Two developments have changed the banking industry’s outlook since the election. These changes are particularly well suited to push our favorite bank stock higher.

The Good Ol’ “Normal” Economy

By Elliott H. Gue on Nov. 29, 2016

A return to a more traditional US economic cycle would be good news for stocks as stronger growth and inflation drive pricing power, revenue growth and higher valuations. But watch these three signals to see if the economy backtracks.

Income Investors: Don’t Sweat Interest Rates

By Roger S. Conrad on Nov. 29, 2016

Dividend-paying stocks have taken a hit during the post-election market rally. Don’t let the conventional wisdom behind the retreat fool you. Instead, take a look at the historical record.

Gold’s Reactions to New Economic Enthusiasm

By Elliott H. Gue on Nov. 25, 2016

Gold prices initially surged on the news of Trump's triumph, but the yellow metal sold off in subsequent trading sessions to about $1,200 per ounce. An uptick in economic growth and inflation from fiscal expansion would take pressure off the Federal Reserve to be the sole engine of economic growth, which could result in two potential outcomes for gold.

Economic Indicators on the Move

By Elliott H. Gue on Nov. 17, 2016

The Federal Reserve has contended with deflationary pressures and a slower rate of potential economic growth, challenges that have made it difficult to hike interest rates. Higher inflation and stronger GDP growth should enable the US central bank to hike interest rates without damaging the economy or triggering a selloff in the stock market. The prospect of accelerating economic growth, higher interest rates and reduce regulation should give financial stocks a boost.

A Change in Plans

By Elliott H. Gue on Nov. 17, 2016

President-elect Donald Trump’s plans for a massive fiscal stimulus via tax cuts and infrastructure spending should extend and perhaps accelerate a lackluster economic recovery that had started to peter out. With the economic outlook improving and inflationary pressure on the rise, this stimulus could give the Federal Reserve the leeway to hike interest rates at a faster pace than previously expected.