Swing Trade Idea – July 27, 2022
Here are five ideas for stocks in rising interest rate environments:
- Goldman Sachs (GS) – Big bank stocks are often some of the very first stocks to react following an interest rate decision. Big banks utilize interest rates for many different types of investments and loans. In addition, many of the big U.S. banks are included in the major stock indices and thus are more likely to follow an index like the S&P 500.
- Visa (V) – Credit card companies are very sensitive to interest rates as these rates dictate the amount of interest a company like Visa can charge its cardholders.
- Rocket Companies (RKT) – Mortgage companies rely on the Fed’s benchmark interest rate to determine mortgage rate for their clients. Mortgage companies will adjust their rates in real time when a key interest rate is changed.
- AllianceBernstein (AB) – Investment managers with a large portion of fixed income assets are likely to benefit in increasing interest rate environments as stocks become less sexy. Moreover, as rising interest rates can initially lead to more volatility in stocks, investors may look to the debt side of the financing world in order to shield against that volatility.
- Bank OZK (OZK) – While regional banks certainly also utilize interest rates to determine their own rates, the likelihood every-day consumers will adjust their banking habits because of interest rate increases is low.