Banking woes, Fed keep investors on edge in nervous stock market

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Many worry that other nasty surprises are lurking

as the rapid series of interest rate hikes the Fed has delivered over the past year dry up cheap money and widen fissures in the economy.

“We are not concerned today about counterparty, liquidity issues” with Deutsche, JPMorgan analysts said in a Friday report. Uncertainty over the Fed’s intentions is amplifying investors’ hesitation in stocks and sparking huge swings in U.S. government bond prices. Falling interest rates would make dividend-paying stocks and some riskier assets such as higher-quality below-investment-grade bonds attractive, Rodriguez said. “It makes sense to take risk in those areas to take advantage of the weakness we’re seeing now.”

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