The prospect of US raising rates interest rates now appears to be firmly in the eyes and expectations of many assets managers

James Marlay

Livewire Markets

The prospect of US raising rates interest rates now appears to be firmly in the eyes and expectations of many assets managers. Goldman Sachs have a view on what it means for markets, the quick takeaway is that stocks look much more attractive than bonds-at least through 2018. Goldman says stocks typically perform well in the months leading up to an initial rate increase. For instance, when the Fed first raised interest rates in 1994, 1999 and 2004, the S&P 500 rallied 11%, 21% and 18%, respectively in the 12 months prior to those moves. The market then declined in each of those subsequent one- and three-month periods following a rate increase. The firm says the response is largely consistent with improving economic conditions that benefit equity returns ans the subsequent valuations. Article via the Wall Street Journal. (VIEW LINK)


James Marlay
Co Founder
Livewire Markets

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