These stocks have thrived during past rate-hiking cycles. Bank of America says buy them now
The bank said quality stocks should "continue to lead given the likelihood of more Fed hikes," while value stocks have a chance to accelerate as profits grow.
TL;DR
- The Federal Reserve has increased interest rates by 25 basis points, with more hikes expected.
- Higher yields on bonds can make them more competitive against stocks.
- Bank of America identifies quality and value stocks as historically strong performers during Fed hiking cycles.
- Specific companies recommended include Madison Square Garden Entertainment, Peloton, and First Bancorp.
- Banks, in general, tend to benefit from higher interest rates as they can charge more on loans.