Silvergate Capital, and Signature Bank in recent days might make for scary headlines. But they could actually be bullish developments for stock investors.
Now, with the prospect of further rate hikes diminished, investors are scrambling to reassess what it means for two main drivers of stock gains: corporate earnings growth and risk appetite. Based on Monday's market action, it's positive: all three US indexes rose, with the more rate-sensitive Nasdaq pacing the gains with a 1.4% increase.
, leading the market to expect a 50-basis-point hike next week, followed by at least a couple more later in the year., and market expectations have started to lean towards something previously unthinkable: rate cuts later this year. That would be rocket fuel for stocks.Fast-rising interest rates throughout 2022 dinged company valuations and sent the broader stock market into a bear market. Now the exact opposite dynamic is now at play.
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