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Zacks Market Edge Highlights: JPMorgan Chase, Bank of America, Goldman Sachs, PNC Financial and United Community Banks
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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 - Free Report) , Bank of America (BAC - Free Report) and Goldman Sachs (GS - Free Report) .
Big regional banks like PNC Financial (PNC - Free Report) will also be beneficiaries.
Look for banks in quickly growth areas of the country like United Community Banks (UCBI - Free Report) , 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?
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Market Edge Highlights: JPMorgan Chase, Bank of America, Goldman Sachs, PNC Financial and United Community Banks
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 - Free Report) , Bank of America (BAC - Free Report) and Goldman Sachs (GS - Free Report) .
Big regional banks like PNC Financial (PNC - Free Report) will also be beneficiaries.
Look for banks in quickly growth areas of the country like United Community Banks (UCBI - Free Report) , 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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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.