Stocks' resilience to rising rates
HSBC has confirmed that rising bond yields pose a future risk to the stock market, but they are not currently hindering the market, especially if ten-year Treasury yields do not exceed 5% or if there is no sharp volatility. They noted that consumers and businesses are capable of withstanding the current pressures, with expectations that interest rates set by the central bank will remain unchanged over the next two years. The report also indicated that high-income households benefit from increased wealth due to rising stock prices, while lower-income individuals are more affected by the impact of variable-interest debt. Meanwhile, the majority of mortgage loans are protected by fixed interest rates. Companies in the S&P 500 index generally have strong balance sheets, with stable debt levels and profits. Sectors such as finance, energy, and industry are likely to benefit from the stability of interest rates at their current levels.
Notice: This Is an AI-Generated Summary
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