Rising Interest Rates May Be Leading To Revaluations In Stock, Bond, And Housing Markets

1/24/2022 6:20:00 PM

Equity Index Futures Pointing Higher as Stocks Look to Bounce Back from Tuesday’s Selloff.

When interest rates rise to a certain level, many investors revalue their investments and alter their price targets

Equity Index Futures Pointing Higher as Stocks Look to Bounce Back from Tuesday’s Selloff.

What’s Next For BlackBerry Stock After A 4% Move Last Week? After the close on Tuesday, trucking company J.Muslim community or any other minority group are in complete violation of the law of the land and the Indian Constitution," the letter states.The news was reported on Sunday after the Deputy Prime Minister Dominic Raab told the BBC's Sunday Morning programme that there was "a very serious risk" of invasion but there would be "severe economic consequences", including sanctions, if Russia took that step.The Washington Post | The Washington Post | Getty Images From fuel to groceries, household goods are getting.

B.Hunt (JBHT) announced better-than-expected earnings and revenue despite lower hauling volumes due to COVID-19-related labor shortages, inclement weather, and train derailments." INDIAN BISHOP DENOUNCES ‘OPEN SEASON’ AGAINST CHRISTIANS AS STATES PASS ‘ANTI-CONVERSION’ LAWS A devotee takes pictures of the illuminated CNI Church ahead of Christmas celebrations in Ahmedabad on Dec.The company reported a 22% revenue increase per load, excluding fuel surcharges.This would be a double whammy for the euro due to the view that Europe’s dependence on Russia’s energy exports would be exposed even more.JBHT rose 0.(SAM PANTHAKY / AFP) "We are of the view that we Catholics cannot remain silent spectators when the drama of violent attacks against the minorities is unfolding before us.10% in after-hours trading.To measure price increases, the site compared the cost of an adult general admission ticket from Dec.

The question for the day is, “Can we hold the higher levels that equity index futures are pointing to?” It has been a challenge to hold the gains especially in the first half hour.The forum went on to urge the cardinal to send a letter asking Indian Prime Minister Narendra Modi and the country's home minister to get involved.In a statement, Foreign Secretary Liz Truss said: "The information being released today shines a light on the extent of Russian activity designed to subvert Ukraine, and is an insight into Kremlin thinking.However, yesterday’s selloff was very orderly and never really got “out of control” which could signal that investor are simply revaluing assets in the light of rising interest rates and not panic selling.Sell Away Rising interest rates and oil prices, with a few misses by big financial companies like Goldman Sachs (GS GS ), appear to have been too much for investors who were selling stocks on Tuesday.The CBCI was also admonished to respond immediately after any harassment or attack on Christian institutions, as well as to provide legal assistance.The VIX (Cboe Market Volatility Index) rallied 18.However, he told the BBC's Sunday Morning programme it was "extremely unlikely" British troops would be sent to defend Ukraine, adding that the country was not a Nato ally.76% to 22.Christian nuns wave placards as they march during a demonstration against the tabling of the Protection of Right to Freedom of Religion Bill on Dec.

79, reflecting a rise in investor uncertainty around the financial markets.The S&P 500 (SPX) fell 1.(Abhishek Chinnappa/Getty Images) During an.However, a close eye will be paid to this type of escalation for today's open and the support could be expected to hold around the 61.84% as investors sold stocks.However, investors were also selling bonds, driving the 10-year Treasury yield (TNX) up 5.25% to 1.Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.

865%.In contrast, the 10-year yield was closed at 1.343% on December 3, 2021, which was its most recent low.It also does not guarantee that this information is of a timely nature.The major stocks indices are lower so far this year.The Dow Jones Industrial Average ($DJI) is down 2.

7% year to date.The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.The S&P 500 (SPX) has fallen 4%.The Russell 2000 (RUT) has dropped 6.6%, and the Nasdaq Composite (COMP: GIDS) is nearing correction territory after closing 7.The author has not received compensation for writing this article, other than from FXStreet.3% year to date on Tuesday.

An asset that investors appear to be buying is crude oil.Oil prices rose 2.FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use.74%, breaking above its November 2021 highs and creating a new seven-year high.Rising oil prices seemed to help energy stocks, which was the best-performing sector on a day when all other sectors finished in the red.Rising rates normally help financial stocks, but they were the worst-performing sector on the day thanks to earnings misses..

The 2-year Treasury yield also rose above the 1% mark.Some investors may see this as a sign that the Fed is going to have raise rates more than Chairman Jerome Powell had originally targeted.After the December Fed meeting, Chair Powell said that the Fed was targeting 0.90% by the end of 2022.The 2-year yield tends to be the most correlated with the Fed’s moves, which is why investors are now looking at the potential that the Fed may have to raise rates higher and sooner.

The CME FedWatch Tool is currently discounting a 91.6% chance that the Fed will raise the overnight rate by a quarter of point in March.The Valuation Variable When interest rates rise to a certain level, many investors revalue their investments and alter their price targets.This is because stock valuation tools like the discounted future cash flows model use interest rates to help determine a company’s intrinsic value.The intrinsic value is a measure of what a company or asset is worth.

The model looks at the rate of earnings growth for a company over a certain period and then discounts those earnings into present value dollars using the “risk-free” rate of return, which is commonly the 10-year Treasury yield.The higher the yield rises, the less those future earnings are worth.But, the 10-year yield isn’t the only factor that can change valuations.Rising business costs like inflation and rising borrowing costs from higher interest rates could also reduce the estimate for future earnings growth or reduce the price multiple that investors are willing to pay for the stock.There are other variables at stake when calculating intrinsic value, but interest rates are an important one.

Valuations are likely the biggest driver helping the S&P 500 Pure Value Index’s recent outperformance of the S&P 500 Pure Growth Index.On November 19, 2021, the value index surpassed the growth index in relative strength.Since that time, the value index has rallied more than 8%, while the growth index has falling nearly 14%.The S&P 500 has also fallen a little more than 2% over the same period.And, apparently, investors are finding the most value in energy stocks because the Energy Select Sector Index has risen 20% in the same time frame.

A group to watch could be the pandemic stocks because investors are struggling to value these stocks if we return to a more “normal” pre-pandemic lifestyle.Many of them like Zoom (ZM) and Peloton (PTON) are struggling to find a landing spot.ZM is down more than 70% from its pandemic high in October of 2020 while PTON is down more than 80% from its January 2021 high.Investors may have trouble pricing these stocks going forward because of the uncertainty around the business climate.CHART OF THE DAY: TARGET RATES.

The 10-year Treasury yield (TNX) has broken above its 2021 highs and...[+] may not find resistance until the 20, or 2%, range.Data Sources: ICE, S&P Dow Jones Indices.

Chart source: The thinkorswim® platform.Yielding Ground: My technical analysis friends tell me that we can use long-term charts to get an idea of how much more interest rates could rise.The 10-year Treasury yield recently broke above its 2021 highs or resistance.The next level of resistance is likely around the 2% level.Depending on how long it takes for the yield to reach resistance, it could mean more volatility for stocks in the short term.

Breaking Bonds: Rising yields also means that the bond market is likely to keep falling too because bond price and bond yields move in opposite directions.However, rising yields will eventually pull income investors from other assets that pay higher dividends like utility stocks or real estate investments trusts (REITs).This is because higher Treasury yields and safety associated with government bonds tends to be more enticing to income investors.In the last three months, we’ve seen this play out.The Utilities Select Sector Index rose about 10% but topped out in at the turn of the new year and has fallen more than 4%.

Similarly, the Real Estate Select Sector Index had risen about 13% going into the new year but is now down about 7.5%.Mortgaging the Future: The housing market could also feel some pain because the 30-year mortgage rate is commonly correlated with the 10-year Treasury yield.The 30-Year Fixed Rate Mortgage Average in the United States closed last Thursday at 3.45% according to FRED, but this morning the Mortgage Bankers Association reported the 30-year mortgage at 3.

64%.To put this into perspective, the 30-year mortgage hit its bottom on January 7, 2021 at 2.65%.According to SFGate, a 0.25% increase on a mortgage rate could add roughly $20 to the monthly payment for every $100,000 on the loan.

Of course, with the build up in the homebuilder backlog, a little less heat may be welcomed by homebuilders and their suppliers, which is one of the reasons why the Fed is raising rates.So far, the housing market appears to be holding up.This morning, the December building permits came in higher-than-expected.While housing starts were lower than the previous month, they were higher-than-expected in December too.TD Ameritrade® commentary for educational purposes only.

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Christian forum asks bishops in India to take stand against rising anti-Christian violenceThe Forum of Religious for Justice and Peace, a group of Catholic clergy and laity in India, wrote a letter to Cardinal Oswald Gracias of Mumbai urging him to attend to the increasing attacks on Christians on the subcontinent, according to Crux Now. All violence is wicked. ✌ Christianity is the most oppressed religion in the world by far. Christians are safe in India , it's a propaganda due to coming elections. Don't take it seriously.

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