Bank of America now expects 7 rate hikes this year. Here's what its chief stock strategist says to buy in preparation.

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Bank of America now expects 7 rate hikes this year. Here's what its chief stock strategist says to buy in preparation.

Business Insider2022-02-08

Investors should consider buying stocks with "attractive" free cash flow metrics as the Fed gets set for new rate hikes, said Bank of America.BofA's economists foresee the Fed raising interest rates ...

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Comment（5）

Chchong
·2022-02-08
Good
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1
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Victorhc88
·2022-02-08
Like
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2
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V K
·2022-02-08
Pls like tyvm[Happy]
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3
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Jason_LSE
·2022-02-08
The rate hikes prediction started with 3 to 5 to 7 .[Gosh] Wondering what's their agenda? [Thinking]
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6
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sioksiok
·2022-02-08
😱
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Here's what its chief stock strategist says to buy in preparation.\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-02-08 11:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://markets.businessinsider.com/news/stocks/stocks-to-buy-recommendations-fed-interest-rate-hikes-outlook-bofa-2022-2><strong>Business Insider</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investors should consider buying stocks with \"attractive\" free cash flow metrics as the Fed gets set for new rate hikes, said Bank of America.BofA's economists foresee the Fed raising interest rates ...</p>\n\n<a href=\"https://markets.businessinsider.com/news/stocks/stocks-to-buy-recommendations-fed-interest-rate-hikes-outlook-bofa-2022-2\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":".DJI","symbol_name":"道琼斯","start_time":0,"source_url":"https://markets.businessinsider.com/news/stocks/stocks-to-buy-recommendations-fed-interest-rate-hikes-outlook-bofa-2022-2","article_id":"1159260103","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1159260103","pubTimestamp":1644289707,"sourceInfo":null,"weMediaInfo":null,"summary":"Investors should consider buying stocks with \"attractive\" free cash flow metrics as the Fed gets set","collect":0,"end_time":0,"defaultTopTitle":"businessinsider.com","property":[],"viewcount":null,"language":"en","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"translate_title":"美国银行现在预计今年将加息7次。以下是该公司首席股票策略师对准备买入的建议。","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{".DJI":0.9,".IXIC":0.9,".SPX":0.9},"content_text":"Investors should consider buying stocks with \"attractive\" free cash flow metrics as the Fed gets set for new rate hikes, said Bank of America.BofA's economists foresee the Fed raising interest rates by seven times in 2021.The Fed will be raising rates in an overvalued market, the investment bank said.Spencer Platt/Getty ImagesStocks that generate strong free cash flow will be good bets for investors as the Federal Reserve embarks on raising interest rates multiple times in 2021, according to Bank of America.The bank's latest forecast is for seven rate hikes this year as the Fed aims to quell scorching inflation. The Fed's signal for an aggressive pace of rate hikes and quick drawdown of its balance sheet has rattled equities so far in 2021, with the S&P 500 down 6% year-to-date.In a new note on Monday, BofA reiterated its 4,600 year-end call for the S&P 500, a target 2.5% above the benchmark's current level. While the firm noted that Fed rate-hiking cycles have historically coincided with stock gains, it says the market is more overvalued than in past cycles, creating a more selective environment for stock-pickers.To that end, it shared a guide for investors looking to contend with a tightening Fed rate-hiking cycle.Savita Subramanian, BofA's head of US equity and quant strategy, first recommends buying stocks with attractive free cash flow metrics — specifically FCF-to-enterprise value and FCF-to-price.\"High FCF based valuation strategies have ailed over the past almost decade of zero interest rates, but the factor has produced the strongest alpha of all of the valuation factors that we track over the long haul,\" Subramanian wrote.Cyclical sectors fare the best in times of rate hikes. The consumer discretionary sector has outperformed the S&P 500 in more hiking cycles than any other but it currently faces risks from rising labor costs as wage pressures intensify, the bank said.Informationtechnology,energy, materials,and staples are other cyclical sectors that have historically done well during rate increases by the central bank.Bond proxies, meanwhile, have fared the worst, meaning tough times for the utilities and real estate sectors.Industrials also have historically suffered in rising rate environments.Small-caps stocks typically outperform large caps in the months leading into the first Fed rate hike. They then slightly underperform, by 1 percentage point on average, over the full hiking cycle.However, \"unlike the majority of other hiking cycles, small caps are historically cheap vs. large caps today,\" said BofA.The Federal Reserve in 1999 began drawing down its accommodative monetary policy and raising interest rates that year more than market investors had anticipated. The hiking cycle ended at 6.5% in 2000. The US economy experienced a recession during the following year.","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":9096394124,"gmtCreate":1644295699895,"gmtModify":1676533910047,"author":{"id":"3562139226887130","authorId":"3562139226887130","name":"Chchong","avatar":"https://static.tigerbbs.com/676dd4f2d7d3a946f6aa7ad0df5736c8","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3562139226887130","authorIdStr":"3562139226887130"},"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9096394124","repostId":1159260103,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9096300162,"gmtCreate":1644291524447,"gmtModify":1676533909332,"author":{"id":"3582248650466523","authorId":"3582248650466523","name":"Victorhc88","avatar":"https://static.tigerbbs.com/d72a1d9498132424b1eddb4db3c77265","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3582248650466523","authorIdStr":"3582248650466523"},"htmlText":"Like&nbsp;","listText":"Like&nbsp;","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9096300162","repostId":1159260103,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9096974774,"gmtCreate":1644291290823,"gmtModify":1676533909309,"author":{"id":"3577323914202336","authorId":"3577323914202336","name":"V K","avatar":"https://static.tigerbbs.com/536d624e5750dcffec704eeed9bc003b","vip":1,"hat":"https://static.tigerbbs.com/ae1f49570794979e009a5efdeb6f4789","crmLevel":8,"crmLevelSwitch":1,"idStr":"3577323914202336","authorIdStr":"3577323914202336"},"htmlText":"Pls like tyvm[Happy]&nbsp;","listText":"Pls like tyvm[Happy]&nbsp;","text":"Pls like tyvm[Happy]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9096974774","repostId":1159260103,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9096972731,"gmtCreate":1644290640349,"gmtModify":1676533909255,"author":{"id":"4095252946433820","authorId":"4095252946433820","name":"Jason_LSE","avatar":"https://static.tigerbbs.com/60e2530d54f2a0d278bad7b3284cdef5","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"4095252946433820","authorIdStr":"4095252946433820"},"htmlText":"The rate hikes prediction started with 3 to 5 to 7 .[Gosh]&nbsp;&nbsp;Wondering what's their agenda?&nbsp;[Thinking]&nbsp;","listText":"The rate hikes prediction started with 3 to 5 to 7 .[Gosh]&nbsp;&nbsp;Wondering what's their agenda?&nbsp;[Thinking]&nbsp;","text":"The rate hikes prediction started with 3 to 5 to 7 .[Gosh] Wondering what's their agenda? [Thinking]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9096972731","repostId":1159260103,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9096976690,"gmtCreate":1644290278365,"gmtModify":1676533909225,"author":{"id":"4095325085452540","authorId":"4095325085452540","name":"sioksiok","avatar":"https://static.tigerbbs.com/160889c74a652c1f0010d6f64aaa8d1e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"4095325085452540","authorIdStr":"4095325085452540"},"htmlText":"😱","listText":"😱","text":"😱","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9096976690","repostId":1159260103,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":70,"commentSize":5,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}