Higher Rates Won’t Kill the Stock Market. What to Do Now.

Barrons2021-03-15

Sometimes when the water gets rough, the first inclination is to find a port to ride out the storm. This isn’t one of those times. Investors would be wise tosail on. Sure, the major indexes finished ...

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Comments

CcccL
2021-03-16
CcccL
I think rates will go up even higher than expected. People will be caught off guard
- CcccL:
  Yes!!! Haha that is what i InteNd to do
- CcccL:
  I am planning to buy cery selevtively though. Only good coMpanies
- Sinktel:
  hu-at ah
- 新運股:
  Then crash,
  Then buybuybuy! [财迷]
Wgmz
2021-03-15
Wgmz
Commented
Sumei
2021-03-15
Sumei
There appears to be an overreaction to every single piece of news
- kuehlapis:
  not good for the heart ?
- Lynny:
  Yes the market is on tenterhooks
navoyhot
2021-03-15
navoyhot
just make it volatile
killuz
2021-03-15
killuz
Hmm
- killuz:
  oo
- Lzoakz:
  Diamond
empt
2021-03-15
empt
?

Leave a comment

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What to Do Now.\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-15 10:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/higher-rates-wont-kill-the-stock-market-what-to-do-now-51615599362?mod=RTA><strong>Barrons</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Sometimes when the water gets rough, the first inclination is to find a port to ride out the storm. This isn’t one of those times. 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","collect":0,"end_time":0,"defaultTopTitle":"barrons.com","property":[],"viewcount":null,"language":"en","relate_stocks":{".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index",".DJI":"道琼斯"},"translate_title":"更高的利率不会扼杀股市。现在该怎么办。","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{".DJI":0.9,".IXIC":0.9,".SPX":0.9},"content_text":"Sometimes when the water gets rough, the first inclination is to find a port to ride out the storm. This isn’t one of those times. Investors would be wise tosail on.\nSure, the major indexes finished higher on the week after settingrecord highsalong the way. Value stocks continued their run-up. Butheightened volatility—especially on theNasdaq Composite—made things look a lot more blustery. The tech-heavy index moved up or down more than 2% three of the five days this past week. 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Higher interest expenses means bondholders, and not stockholders, get a bit more of a company’s cash. Second, theyreduce the valueof future cash flow and dividends, hitting growth stocks especially hard.\nYet rates aren’t even all that high. The 10-year Treasury yield has gone from about 1.2% to 1.6% over the past month. Rates were higher than that back in January 2020, before the pandemic. What is really vexing investors is how fast they have risen.\nAt the end of 2020’s third quarter, the 10-year Treasury yield was about 0.7%. On Feb. 16—the date the Nasdaq reached its all-time high—it was 1.3%, a 60-basis-point increase. (A basis point is 1/100th of a percentage point.) The Nasdaq rose 21% over that span. Then bond yields went from 1.3% to 1.6% between Feb. 16 and March 8, just after the Nasdaq entered correction territory. That’s a 30-basis-point move in less than a month. The Nasdaq tanked, dropping 10%.\n“When rates creep higher, the market can take that,”Andrew Slimmon, a senior portfolio manager at Morgan Stanley Investment Management, tellsBarron’s. “The path of rates—the speed at which rates move—is the key question.”\nRates matter, but they can’t explain all the swings of the Nasdaq this past week. U.S. inflation data, for instance, was benign on Wednesday. Consumer prices rose at a slower rate than expected, and bond yields fell. Still, the Nasdaq, which had jumped almost 2% early in the day, gave up all its gains and closed lower.Tesla(ticker: TSLA), ahighflying growth stock, which had risen more than 6% that day, closed down 0.8%.\nThe reason? “Investors were worried about being overweight growth stocks,” says Slimmon. Growth stocks have trounced value stocks for years, but more recentlyvalue has made a comeback. TheRussell 1000 Value index,for instance, is up about 11% year to date. 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For him, tech stocks aren’t dead, but value-oriented, cyclical stocks such as industrial companies, financials, materials producers, and travel companies look even more attractive.\nMarketwide valuations area little high, he acknowledges. That’s another risk his clients are worried about. “Elevated, not stretched,” is how Rauscher characterizes the situation. “Is the market above fair value? Sure. Is it ridiculous? No.”","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":322772791,"gmtCreate":1615846242013,"gmtModify":1704787315423,"author":{"id":"3566877420609993","authorId":"3566877420609993","authorIdStr":"3566877420609993","name":"CcccL","avatar":"https://static.tigerbbs.com/27eb54773a8f0b3851def7cabc15cb0e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3566877420609993"},"htmlText":"I think rates will go up even higher than expected. People will be caught off guard","listText":"I think rates will go up even higher than expected. People will be caught off guard","text":"I think rates will go up even higher than expected. People will be caught off guard","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":4,"repostSize":0,"link":"https://ttm.financial/post/322772791","repostId":1143590834,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3814769,"gmtCreate":1615961698286,"gmtModify":1680780683390,"authorId":3566877420609993,"author":{"id":3566877420609993,"authorId":3566877420609993,"name":"CcccL","avatar":"https://static.tigerbbs.com/27eb54773a8f0b3851def7cabc15cb0e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322772791,"type":1,"supId":3803799,"prevId":0,"content":"Yes!!! Haha that is what i InteNd to do","text":"Yes!!! Haha that is what i InteNd to do","html":"Yes!!! Haha that is what i InteNd to do"},{"id":3814775,"gmtCreate":1615961724392,"gmtModify":1680780677409,"authorId":3566877420609993,"author":{"id":3566877420609993,"authorId":3566877420609993,"name":"CcccL","avatar":"https://static.tigerbbs.com/27eb54773a8f0b3851def7cabc15cb0e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322772791,"type":1,"supId":3803799,"prevId":0,"content":"I am planning to buy cery selevtively though. Only good coMpanies","text":"I am planning to buy cery selevtively though. Only good coMpanies","html":"I am planning to buy cery selevtively though. Only good coMpanies"},{"id":3805742,"gmtCreate":1615873145941,"gmtModify":1680780538304,"authorId":3553486312989116,"author":{"id":3553486312989116,"authorId":3553486312989116,"name":"Sinktel","avatar":"https://static.tigerbbs.com/dded9bdf22ca014f2486ae356ebd46bb","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322772791,"type":1,"supId":0,"prevId":0,"content":"hu-at <u>ah</u>","text":"hu-at <u>ah</u>","html":"hu-at <u>ah</u>"},{"id":3803799,"gmtCreate":1615856945798,"gmtModify":1680780505842,"authorId":3554930019589170,"author":{"id":3554930019589170,"authorId":3554930019589170,"name":"新運股","avatar":"https://static.tigerbbs.com/96dbdc016b8e3ed8f796ebddecd0b2ca","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322772791,"type":1,"supId":0,"prevId":0,"content":"Then crash, \n<br>Then buybuybuy!   [财迷]","text":"Then crash, \n<br>Then buybuybuy!   [财迷]","html":"Then crash, \n<br>Then buybuybuy!   [财迷]"}],"langContent":"EN"},{"id":322131305,"gmtCreate":1615781447307,"gmtModify":1704786394496,"author":{"id":"3578414014416070","authorId":"3578414014416070","authorIdStr":"3578414014416070","name":"Wgmz","avatar":"https://static.tigerbbs.com/550969253cbe7b184f246385991eb17e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3578414014416070"},"htmlText":"Commented","listText":"Commented","text":"Commented","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/322131305","repostId":1143590834,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":322340084,"gmtCreate":1615776615948,"gmtModify":1704786335276,"author":{"id":"3566259831309087","authorId":"3566259831309087","authorIdStr":"3566259831309087","name":"Sumei","avatar":"https://static.tigerbbs.com/ae0a2af1baf6b07a87ffdf41ea17959a","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3566259831309087"},"htmlText":"There appears to be an overreaction to every single piece of news","listText":"There appears to be an overreaction to every single piece of news","text":"There appears to be an overreaction to every single piece of news","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/322340084","repostId":1143590834,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3800302,"gmtCreate":1615817687284,"gmtModify":1680780452220,"authorId":3574029017802033,"author":{"id":3574029017802033,"authorId":3574029017802033,"name":"kuehlapis","avatar":"https://static.tigerbbs.com/732ffeea71fc0732b84f029cc0e8263e","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322340084,"type":1,"supId":0,"prevId":0,"content":"not good for the heart ?","text":"not good for the heart ?","html":"not good for the heart ?"},{"id":3796316,"gmtCreate":1615784882979,"gmtModify":1680780390269,"authorId":3576275613425159,"author":{"id":3576275613425159,"authorId":3576275613425159,"name":"Lynny","avatar":"https://static.tigerbbs.com/7c0b8b78e97626dedf9ed61da1957ab7","vip":1,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322340084,"type":1,"supId":0,"prevId":0,"content":"Yes the market is on tenterhooks","text":"Yes the market is on tenterhooks","html":"Yes the market is on tenterhooks"}],"langContent":"EN"},{"id":322353260,"gmtCreate":1615775879750,"gmtModify":1704786326220,"author":{"id":"3549788653484864","authorId":"3549788653484864","authorIdStr":"3549788653484864","name":"navoyhot","avatar":"https://community-static.tradeup.com/news/bfe3e29a700e58ce7b6c853c067b7f3c","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1,"idStr":"3549788653484864"},"htmlText":"just make it volatile&nbsp;","listText":"just make it volatile&nbsp;","text":"just make it volatile","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/322353260","repostId":1143590834,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":322329575,"gmtCreate":1615775039597,"gmtModify":1704786312411,"author":{"id":"3571731917050098","authorId":"3571731917050098","authorIdStr":"3571731917050098","name":"killuz","avatar":"https://static.tigerbbs.com/f2f7506133b4298111ecff9ef46ff33c","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":4,"crmLevelSwitch":1,"idStr":"3571731917050098"},"htmlText":"Hmm","listText":"Hmm","text":"Hmm","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/322329575","repostId":1143590834,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3809980,"gmtCreate":1615905954030,"gmtModify":1680780595666,"authorId":3571731917050098,"author":{"id":3571731917050098,"authorId":3571731917050098,"name":"killuz","avatar":"https://static.tigerbbs.com/f2f7506133b4298111ecff9ef46ff33c","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-2","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Master 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