Wall Street Shifts To 'Bossing The Fed Into Big Rate Cuts' After Bank Of Japan's Policy U-Turn, Analyst Says
Portfolio Pulse from Piero Cingari
The Bank of Japan's policy reversal has led Wall Street to anticipate significant interest rate cuts from the Federal Reserve. Bank of America's Michael Hartnett suggests that these cuts are necessary to avoid a hard landing for the economy. He recommends selling AI stocks after the first cut and buying assets that could benefit from lower yields, such as government bonds, REITs, small-cap stocks, and distressed emerging markets.
August 09, 2024 | 1:34 pm
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POSITIVE IMPACT
The iShares MSCI Brazil ETF (EWZ) could benefit from a weaker dollar and lower global interest rates, which would support emerging markets like Brazil.
A weaker dollar and lower global interest rates support emerging markets, benefiting EWZ.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares Russell 2000 ETF (IWM) could benefit from lower interest rates, which would ease borrowing costs for small-cap companies.
Lower interest rates ease borrowing costs for small-cap companies, which would benefit IWM.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) is expected to benefit from anticipated interest rate cuts by the Federal Reserve, as lower yields make long-term government bonds more attractive.
Lower interest rates typically increase the attractiveness of long-term government bonds, which would benefit TLT.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The Vanguard Real Estate ETF (VNQ) may see gains as lower interest rates reduce borrowing costs, benefiting the real estate sector.
Lower interest rates reduce borrowing costs, which is beneficial for the real estate sector and VNQ.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80