By Sharon Fay, Chris Marx
Rising rates are typically good for stocks, especially when they're rising because of a strengthening economy. That should mean better days ahead for many post-crisis laggards. But a lot will depend on how inflation behaves.
After a series of head fakes, interest rates and potentially inflation appear to be coming out of their funk. Governments across the globe are shifting from monetary to fiscal stimulus to reinvigorate growth, with the US at the forefront. An array of proposed pro-business policies from the new US presidential administration - including lower corporate taxes, repatriation of cash held offshore and looser regulation - has lifted confidence in US and, in turn, global growth.
So what does all this mean for stocks? Each rate cycle has been unique, but history can give us clues to what may lie ahead.
As we wrote in the wake of the 2013 Taper… Read More …