From the Desk of Ian Culley @Ianculley
Interest rates have resumed their ascent following a brief summer pause. And, in recent weeks, their climb has accelerated.
Aside from lower bond prices, what do higher rates mean for other assets, such as stocks and commodities?
It might seem like a simple question. But its relevance is undeniable given the current market conditions.
We’ve been vocal about the cyclical areas of the market that benefit most from a rising rate environment – think commodities, energy, materials, and banks. We’ve put out plenty of trade ideas in those areas.
But not all risk assets enjoy a tailwind when yields rise.
Higher rates mean downside pressure for long-duration assets in general, not just bonds. This also includes growth stocks!