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Stocks and sectors affected by rising interest rates?

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It looks like the days of Rising Interest Rates is truly coming this time, though everything was at rhetoric stage in previous years. Which stocks would be affected, and which sectors are mostly at risk when interest rates do go up, starting from mid-Dec, FOMC Mtg ?
 
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It looks like the days of Rising Interest Rates is truly coming this time, ?
Who knows what will happen ahaha

I am only amateur do not take my advice do your own research

Interest rates have a general interplay with the strength of the economy.

On one hand increased interest rates dampen the economy but on the other hand if the economy is going strong then this can affect company performance, earnings, sentiment etc etc and therefore stock prices.



Which stocks would be affected, and which sectors are mostly at risk when interest rates do go up, starting from mid-Dec, FOMC Mtg ?
If you are seeking to profit from a movement in interest rates, then why no go directly to the horses mouth.

Bond markets and short term interest rate markets will normally down as rates rise.

This has really strong correlation with interest rates

Look at the chart form tradinge conomics


aus irates vs bonds.PNG


us irates vs bonds.PNG









A second market would also be currency markets which also have a really strong correlation with central banks decisions.

aud vs irates.PNG


usdollar vs irates.PNG










Stocks will also have other factors affecting them so I would look at interest rates as part of the picture.

You have idiosyncratic risk, each company is different, each market is different. What is rates are going up hurting the company through higher interest costs but the economy is going gangbusters.

Not to mention each country has it's own differences.


Even of you knew in 2008 that interest rates would go down then you still could have lost money on the stock market in general index investing.


asx vs irates.PNG

And if you knew from 2000 onwards , then rates were also increasing at that time as well in a bull market.
 
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us30 vs irates.PNG

This is because the economic conditions, fear and exuberance overpowered the government intervention.

So this time the same could happen.

Even if rates go up, in the short term there may be trading opportunities but in the long term the market could go up anyway, specifically trump racks up debt to stimulate the economy.

Conversely there could be crisis in china which keeps rates low again, who knows.

The point is investing in stocks based on solely interest rates is a bit of a blunt tool.




It also depends on whether you are looking at short term or long term decision making.

In the short term markets may react to announcements, even though in the long term the effect is not as pronounced.

For example before the announcement and after the announcement the market may move a lot but in the bigger picture the effect is not that much.

In longer term decision making then you are looking at the market and saying the fundamentals are good and the sentiment will pass, now rates are low, so when sentiment turns around the the good business that I own will do even better paying lower interest costs.

My :2twocents


Cheers
 

skc

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Kryzz

shaun
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It looks like the days of Rising Interest Rates is truly coming this time, though everything was at rhetoric stage in previous years. Which stocks would be affected, and which sectors are mostly at risk when interest rates do go up, starting from mid-Dec, FOMC Mtg ?
If current sentiment (past few months) is anything to go by, seems like the financials and materials are really kicking into gear.

Gold and REITs have taken a notable hit, consumer discretionary also adversley affected down around 15% from recent highs only the other week.

You may also find sector and currency heatmaps useful too.
 

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