Higher interest rates might be scaring stock investors, but they haven’t held back the stock market this year, according to a study by Credit Suisse Securities.

“Year-to-date, if you invested only on dates when interest rates went up, your annualized return would be 16 percent,” said Jonathan Golub, chief U.S. equity strategist at Credit Suisse. Golub studied the correlation between the S&P 500 and the 10-year yield and found that for 2017, stocks gained 31.2 percent based just on the way they moved on days when bond yields rose.

“The argument that the market is selling off because of rising rates is mathematically wrong,” he said.

Some analysts say a 10-year yield of 3 percent or even 3.5 percent could be a problem for the market. But Golub said stocks should respond positively to higher yields until they reach a level around 3.5 percent. Instead of acting as a barrier to stocks advancing, the 3.5 percent level is more of a neutral area, he said.

Source link

Products You May Like

Articles You May Like

How Africa is countering the US-China trade spat
Feeling nervous from stock market zigzagging? Here’s what to do
CPR AM on tapping into the silver economy
Trump used fake persona to lie about his wealth: former Forbes writer
Premier league soccer clubs announce record $700 million in profits

Leave a Reply

Your email address will not be published. Required fields are marked *