Goldman Flags Rate Risk to Equities While Tom Lee Sees Benefit

  • Ford, GE poised to enjoy a reduction in pension deficits: Lee
  • Stock pain hard to escape when yields up 40bps a month: Kostin

Higher interest rates are an enemy of U.S. stocks, right? Goldman Sachs Group Inc. says yes, especially if yields rise quickly. For Tom Lee at Fundstrat Global Advisors LLC, the equity market also contains some less-obvious beneficiaries.

Consider companies with big pension shortfalls, which have persisted since the global financial crisis in part because low yields mean the present value of those liabilities is higher, Lee wrote in a note. Higher borrowing costs will bolster balance sheets of firms including Ford Motor Co. and General Electric Co. as their deficits narrow, he says…
Categories : Private Equity

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