data

10 Best Stocks for Rising Interest Rates

In March, the Federal Reserve raised benchmark interest rates for the first time since 2018. And in the intervening weeks, Fed Chair Jerome Powell has been increasingly clear that even higher rates may be on the way soon. That has investors scrambling to scrape up the best stocks for rising interest rates.

Speaking on March 21, Powell said the central bank will move “expeditiously” and “more aggressively” towards higher interest rates. That has left little doubt in the minds of many investors about what’s in store for the markets in the coming months.

To be clear, rates are still relatively low even after all this. The effective federal funds rate now sits at 0.33% instead of 0.08% prior, but that’s not even within earshot of rates from prior decades that were several full percentage points higher.

Furthermore, rising rates should never be seen as a death knell for the economy. In fact, the presence of rate increases is because the Federal Reserve sees inflation as a bigger risk to the U.S. economy than the burden of higher borrowing costs. If businesses and consumers weren’t churning along, there would be concerns of how these rate hikes would be absorbed, keeping Powell and other policymakers in check.

There are certainly changes that are afoot as a result of higher interest rates, but investors should not make the mistake of thinking these moves means you should abandon the stock market entirely. Indeed, several of the best stocks for 2022 had the potential for rising rates on the mind, and today, we’ll be looking at a few that are tailor-made for this environment.

Here are 10 of the best stocks for rising interest rates. The potential options presented here are for those concerned about mitigating the impact of rising interest rates throughout 2022.

  • SEE MORE Warren Buffett Stocks Ranked: The Berkshire Hathaway Portfolio

Data is as of April 3. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Moving to San Jose: What All Renters Need to Know

Living in San Jose you’ll experience great neighborhoods, good food and a booming job market.

The post Moving to San Jose: What All Renters Need to Know appeared first on The Rent.com Blog : A Renter’s Guide for Tips & Advice.

What is the Fair Housing Act and How Does It Impact Renters?

Housing is an equal opportunity for everyone.

The post What is the Fair Housing Act and How Does It Impact Renters? appeared first on The Rent.com Blog : A Renter’s Guide for Tips & Advice.

Investing vs. Trading Stocks – What Exactly Is the Difference Between Them?

Investing is a long-term activity and trading is focused more on quick wins. Learn the differences here and the pros and cons of each.

Stock Market Today: Ukraine Talks Bring Out the Bulls

Fresh signs of at least the potential of a resolution in Eastern Europe whetted risk appetites Tuesday, even as the ominous 2-10 yield curve came even closer to inverting. 

During the latest round of talks with Ukraine today, Russian Deputy Defense Minister Alexander Fomin said his country’s military would “drastically” remove its military presence from Kyiv. That triggered another day of buying from investors, who weren’t deterred by a U.S. official’s skeptical comment to news outlets that Russia’s moves indicated “a redeployment, not a withdrawal.”

  • SEE MORE The 22 Best Stocks to Buy for 2022

Wall Street also wasn’t put off by a potential inversion of the two- and 10-year Treasury rates – “potential” being the key word, as various data sources conflicted on whether the two-year’s yield merely equaled the 10-year yield or surpassed it.

Even then, Lauren Goodwin, economist and portfolio strategist at New York Life Investments, warns against using a yield inversion as an egg timer.

“While curve inversion has historically been an important market signal of recession risk, it does not tell us much about when recession might likely occur,” she says.

Sign up for Kiplinger’s FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Real estate investment trusts (REITs) including mall operator Simon Property Group (SPG, +4.8%) and Public Storage (PSA, +3.4%) enjoyed the biggest gains Tuesday, with the sector up 2.9% to lead the S&P 500 (+1.2% to 4,631). The Nasdaq Composite had an even better day, up 1.8% to 14,619, while the Dow Jones Industrial Average recorded a 1.0% gain to 35,294.

YCharts

Other news in the stock market today:

  • The small-cap Russell 2000 roared ahead by 2.7% to 2,133.
  • U.S. crude oil futures retreated 1.6% to end at $104.24 per barrel.
  • Gold futures fell 1.4% to settle at $1,912.20 an ounce.
  • Bitcoin slid 0.5% to $47,720.70. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
  • Shares of Robinhood (HOOD) spiked 24.2% after the financial services platform said it extended trading hours for clients. Customers on HOOD’s platform will now be able to trade between 7 a.m. through 8 p.m. ET, giving them an additional four hours. This big upside move put a dent in HOOD’s year-to-date deficit. Heading into today, shares were down nearly 28% for the year-to-date.
  • FedEx (FDX) gained 3.7% on news Fred Smith will step down as CEO, effective June 1. Smith has been overseeing the delivery giant since he founded the company in 1973. He will be succeeded by Raj Subramaniam, current president and chief operating officer of FedEx. “We anticipate a seamless transition as FedEx appears to have been grooming Mr. Subramaniam to be the company’s next CEO,” says Oppenheimer analyst Scott Schneeberger (Perform). “In recent years Mr. Smith appeared to have been ceding an increasing amount of operational and investor-facing responsibility to his top reports, particularly Mr. Subramaniam.”

Push Back on Inflation

We’ll find out March’s jobs tally later this week, but another data point on Wall Street’s watch list is the core Personal Consumer Expenditures (PCE) price index.

  • SEE MORE 5 Superb Stocks to Shield Against Stagflation

That report, due out Wednesday, represents the Federal Reserve’s favored gauge of inflation – another critical factor in the market’s direction from here. 

“We believe it is important to point out the historical impact that inflation can have on equity market valuation,” says John Lynch, chief investment officer for Comerica Wealth Management. “Specifically, high levels of inflation … have historically pressured the price-to-earnings (P/E) ratio for the S&P 500 Index. Historically, when the CPI approaches 8.0%, the average [trailing 12-month] P/E for the S&P 500 is ~12, which could bring the index to unspeakable levels.”

Given that the S&P 500 currently trades at more than 26 times trailing earnings, that would be very bad news, indeed. 

You can swat back at inflation via just about any investment type you like. Those looking to make concentrated bets against rising prices can consider these five stocks poised to push higher in an inflationary environment, while those who prefer a diversified approach might instead prefer these five mutual funds.

But some of the most interesting tools in the tool box are inflation-fighting exchange-traded funds (ETFs). Several of these ETFs simply happen to be positioned in areas of the market that do well as prices expand, but in some cases, an inflation-resistant portfolio is the explicit goal.

  • SEE MORE Warren Buffett Stocks Ranked: The Berkshire Hathaway Portfolio

How to Destroy Your Debt and 3 Things to Do Next

Here are some simple tricks to pay off your debts, along with some sound advice on next steps.