Rising Interest Rate Shock: 2019 Edition | Value Investing News

Rising Interest Rate Shock: 2019 Edition

  • Back in February I published the table below to show investors where the S&P 500 index would likely trade if interest rates normalized (10-year bond between 3% and 5% is how I defined it):
  • If the current consensus forecast for earnings comes to fruition, the market does not appear to be headed for a material fall from today’s levels.
  • Add in about 2% in dividends and a flattish equity market overall seems possible over coming quarters if earnings fall to post double-digit gains next year and valuations retreat to more normal levels.
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