Interest rates rose and stocks fell on Thursday, as investors reckoned that they had overshot the Fed’s willingness to cut interest rates.

This isn’t anything to get excited about. After a 65-basis-point slide since last October, inflation-indexed Treasury yields were due for a bounce.

The best way to address the issue in a portfolio context is to own US banks, whose stock prices tend to improve with higher interest rates. US bank stocks rose by about 1.2% on Thursday in response to higher yields. As I wrote on April 22, US bank stocks are reasonably priced at 11x forward earnings.

Read more: Wall Street’s ‘transitory’ tantrum

Join the Conversation

8 Comments

  1. Very efficiently written story. It will be useful to everyone who utilizes it, including me. Keep doing what you are doing – for sure i will check out more posts.

  2. Woah! I’m really enjoying the template/theme of this website. It’s simple, yet effective. A lot of times it’s difficult to get that “perfect balance” between usability and visual appeal. I must say you have done a fantastic job with this. Also, the blog loads very quick for me on Opera. Exceptional Blog!

  3. Attractive section of content. I just stumbled upon your web site and in accession capital to assert that I acquire actually enjoyed account your blog posts. Anyway I’ll be subscribing to your augment and even I achievement you access consistently quickly.

  4. I know this if off topic but I’m looking into starting my own blog and was wondering what all is required to get set up? I’m assuming having a blog like yours would cost a pretty penny? I’m not very web savvy so I’m not 100 sure. Any tips or advice would be greatly appreciated. Cheers

Leave a comment