High rates haven't always been a problem for stocks

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Brian Belski News

BMO Capital Markets,Bond Yields,Research Note

Research from BMO Capital Markets shows stocks have actually performed better under higher interest rate regimes over the past three decades.

In an analysis going back to 1990, BMO Capital Markets chief investment strategist Brian Belski found the S&P 500 delivered an average annual return of 7.7% in months when the 10-year Treasury yield was less than 4%, compared to an average annual return of 14.5% in months when the 10-year was 6% or higher.

scaled back investor expectations for Federal Reserve cuts this year. Markets are now expecting two interest rate cuts this year, per Bloomberg data, down from a peak of seven cuts expected in January. "So if we can hover between this 4% and 5% range and still have strong employment, but most importantly, have very strong earnings and, oh by the way, cash flow, I think the market can do very well," Belski said.

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"The inflation data for March should give monetary policymakers confidence that the progress made in taming consumer price pressures is sustainable."BCE stock has a super-swollen dividend yield right now as it passes 9%. The post BCE Stock’s Dividend Yield Hits 9%—Is it Finally Time to Buy? appeared first on The Motley Fool Canada.

 

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