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Winners And Losers From A Fed Rate Hike
Here is the quick snapshot of the winners and losers if today the Fed tightens (in the process crushing another battalion of FF/Eurodollar traders who still see the probability of a tightening cycle starting today at under one-third).
Logically, if the Fed does not tighten, just flip the winner and loser columns.
Source: BofA
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Except for stawks, they'll go up no matter what.
Oh, and gold, too....except the opposite for that one; it'll go down no matter what.
Winners - Savers
Losers - Government tyranny and the New York Propaganda Machine.
yeah a token rate hike in the fed funds rate will really help me get a better return on my savings. maybe ill get a whole dollar in interest next month.
the real winners will be the same people who always win. the real losers will be the people who always lose.
it's a big club and you and me aint in it.
How did consumers get in the Winners column. I thought we had our own column - Suckers
Some guy was paid to put this together....actually paid! Think about that as an indicator before you press 'click'
LOL, and he thinks stocks will benefit from a hike. That's why the market gives a hissy-fit avery time it think about interest rates rising 0.25%.
real estate?
How the heck would stocks be a winner with fed tightening?
I was puzzled by that too, until I saw this at the bottom of the article:
"Source: BofA"
The Rate hike will crush the Credit Card indebted consumer.\
The rate hike will crater stocks as well as crush bonds. (Bonds will lose as everybdy who owns current bonds will dump as they are chasing the newer issues at higher rates. Thus there will be a large supply dumped onto the market. The stocks will be cratered as a result of the tightening of borrowed funds to purchase the damned things.)
BofAML needs to do themselves a favor and fire their "analysts".
Rate hike burns medium and low end real estate values But don't worry, hi end will be just fine.
This. Also, I'm not sure I agree with them on commodities either. How much more can commodities be legitimately pummeled, and weren't low interest rates the culprits in over-investment in commodities production over the last several years?
I tend to think higher interest rates will lead to consolidation in commodities, less fixed investment, and potentially higher long-term prices. But what do I know?
I thought the list looked kind of funny too, until I noticed it was created by Bank of America Merrill Lynch! Never mind!
speaking of only getting one dollar. can one dollar even buy anything anymore? what is that like 15 seconds of hookers and blow?
Dunno about the blow but 15 seconds should be ample for the hooker, might even have some change coming
Losers: all of us, for we are financially controlled by the unelected.
Much better if we aree financially controlled by the elected.
Surely there is a robot or monkey capable of doing the job of whoever came up with this tripe.
Now, please pass the bread and wine so I can enjoy the circus.
Yes, growth. Of what?
LOSERS = USA
Rate up = deflation for USA
Rate up = more exspensive exports
DOLLAR IS A LOSER YOU FUCKING MORONS sorry
RATES UP MEANS BOND SELLING MEANS FRONT RUNNING THE FED OUT MEANS DOLLARS ENTER THE FOREX MARKET.
And what is bad for EM's means EM's will stop buying and sell more US paper. Who comes in at #5 with the 5th most treasuries in the world ? Brazil.
Rates hike means EM liquidation of treasuires means once again, more dollars on the forex market.
I thought stawks were winners under MOAR QE, not less??
Do the opposite of that list, the losers are the winners and the winners are the loser after all its a banker talking here.
Anybody have opinions on how this will affect the Ruble?
The rouble seems to be tied directly to the oil price. I suppose if the Fed tightens, commodities will probably fall including oil so the rouble would too. Just my guess.
That's very funny and untrue.
Higher rate is good for commodities and bad for stocks.
We are not currently at market bottom but at market peak, so we cannot say rate hike will be good for stocks.
Disagree Blopper
Higher $ means more peeps around the world investing in USA stocks
Dollar is going down in a big way, it broke out of its flag back in August that was the tell The long dollar crowd is in for a rude awakening.
http://www.macrotrends.net/1329/us-dollar-index-historical-chart
Looks to me like it could be going back to 1985 levels
Explain to me again how higher rates = higher stock prices? If rates go up, the discount factors for future cash flows are greater, leading to smaller present values = lower stock prices. If rates go up, there will be a great disturbance in the algo force that is using USD carry trade (borrowing USD to buy financial assets) and stocks are one of the beneficiaries of this carry trade. When the FED has tightened in the past, stocks have fallen in price. So.... explain how higher rates = higher stock prices? I think we have a situation where you sell the rip today. If we get a rate increase, stocks get hit. If we get status quo, stocks pop but then fall on "selling the news" and profit taking. If we get rate cut = trees grow to the sky.
The whole thing smacks of muppet-baiting by Merrill. They (and other squids) will pop the market via futures to get dumb money buying and then sell their preferred clients into that volume. Afterwards, the flood.
@gmak
capital will concentrate in the USA pushing the dollar higher.
Higher the $ the more capital will flow into the USA
And what will that capital buy??
They ain't gona park it in a bank...................are they
Hilarious lol
Yes Bill of Rights
And who will laugh last.
You will of course and I will call you out when the time comes.
Well give it time.
Do you think that only Americans can buy US stocks and the earth is flat?
PS Not going to talk about a knee jerk reaction either...........we are talking trend
You must ask yourself, what is the Fed holding and what is in the best interest of the Fed.
The United States is secondary, if not tertiary to share holders of the Fed.
http://www.federalreserve.gov/monetarypolicy/bst_fedsbalancesheet.htm
Sure - I can explain the positive impact of a rate rise on stocks to you. It's like this; if Janet raises rates today, no matter what hell breaks loose across the world, a 'Mysterious' and very, very large buyer will suddenly appear from nowhere and stocks will rampage higher.
Simples.
Deez nuts
If the Fed tightens, U.S. Connedsumers WIN! YAY! Plus 'value' wins too...YIPPEE!
Come on....
So just keep stocks and Commodities firmly in their columns and flip flop the rest and you can see why Mr. Yellen will now raise rates. And if she doesn't Will prove that they never will because they can't.
PS. Tightening should be NOT GOOD for stocks. But at this point who cares.
I do, just so next time I make sure this never happens again, at any cost too.
rate hike will kill stocks.
How do stawks go up if the dollar strengthens when 40% of US international corps' profits come from overseas?
Makes no sense.
Buyers from abroad see it as a curency gain if the buy US stocks and the currency increases when they sell they get more of thier own currency back
BullishBear94
Vote up!2
Vote down!
0Borrowing money at a 3% rate is still much cheaper than repatriating cash and paying 35% income tax.
A raise in the rate won't stop any company from buying back stock.
BofA Merrill NONSENSE. Higher interest rates bad for stocks, esp. dividend-based stocks. Also bad for consumer, except savers. Maybe they are trying to purposefully confuse to blunt the effects of a hike.
They are not trying to "confuse", they are announcing precisely what will happen. Stocks will "magically" go up and gold will "unfortunately" go down.
This is stupid on so many levels. So low rates have killed commodities but now higher rates will kill them. Hahahahah
So what's going up and what's going down?
Stupidity on the rise, while IQ levels drop from watching this ShitShow....thinking about ignoring it permanently.
The price of meat has just gone up
And your old lady has just gone down
Zappa
Whatever it is the next 2 hours in the markets are going to be an E Coupon ride...weeeee
Until you have owned a stack of Gold, you can't even imagine the euphoria it brings. It's that powerful, don't know why but it does.
Gold Bitchez.....I pick up pennies
Even stacking silver has it's own special power. Having either metal as delivered to you is economic KRYPTONITE to these bankster scum!
Now I have to figure out how to ignore the massive woodie this thinking gave me.
It gives the greatest satisfaction by sending a great big FUCK YOU to the thieving scum banksters and politicians. That measn YOU Lloyd Blankfein, Jamie Dimon, most of congress and OBLOWME too.
Winner - the Fed, its employees and their close friends.
Losers - everyone else.
Just for the record:
Release Date: August 12, 2009
“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
Release Date: August 10, 2010
“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
Release Date August 9, 2011
“The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”
Release Date: August 1, 2012
“The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
Release Date: July 31, 2013
“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.”
Release Date: July 30, 2014
“In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate,the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percentinflation.”
Release Date: July 29, 2015
“The Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation."
Heard enough bullshit yet? No. I thought so. You want more
Thanks for that.
Regardless of what the Fed does
Winners - Bankers & Politicians
Losers - Everyone Else
stocks and bonds should switch columns imo
US Consumer
Chinese Producer
Who ya gonna vote for?
We truly live in a bizzaro world if no rate hike is bad for stocks and a rate hike is good for stocks.
ill just be happy either way if we get to 2.00pm without some sort of false flag attack
a hike good for stocks? huh?
<-- Winners - NYC Democrat/Socialists
<-- Losers - YOU
which should I pick if I work on Wall Street?
Shit article. 101 in investing. There are two sides in every trade. Big corporations borrow collosal amount of loans to buy back their own shares. Imagine what they will do if the Fed raise interest rate.
Borrowing money at a 3% rate is still much cheaper than repatriating cash and paying 35% income tax.
A raise in the rate won't stop any company from buying back stock.
Thanks.
So it seems today is the "big day" everybody has been waiting for.
But still, only two things matter:
1) Stocks (if they go up, everything is awesome) and
2) Gold (if it doesn't go up, everything is awesome)
So stocks up, gold down and all is ok in the bankers world, this means status quo is still valid, the gambling can continue.
Since everybody knows that central banks buy stocks and that the gold price is heavily manipulated, who in their right mind would believe that the central bank actions for the aftermath of the "big decision" wouldn't be planned since months? Shouldn't it be crystal clear to everybody: The day of the first rate hike, and the days (and weeks?) after that, many CB's will buy stocks like crazy and gold will be slammed like there is no tomorrow. And the mass media will make sure that everybody keeps believing in the FED and the Central Banks.
It's just theater.
The theater is dead, long live the theater.
Assuming that the true interest rate would be over 2% if the market was allowed to do its job, the losers over a .25% rate hike depends on what the Fed says.
If they say that this is the beginning of rate hikes to find where the market is, the immediate losers will be those who have been gaming the Fed (hint: those who control the HFTs, like Morgan Stanley, Goldman Sachs, etc...). Those of us who believe that the markets should decide will win once the HFT carnage is over.
If it's a "one and done", we are all losers. In that case, it would be a good time to begin shutting down the Fed permanently. We cannot afford a centrally planned global economy managed by people who are frozen by the headlights heading right at them.
Typo. Stocks are supposed to be on both sides.
Given that the economy looks more like just before "First Cut" in pre-2008 times, I think Bonds do better with a hike. Low inflation? Hike and go for full-retard deflation! Buy bonds.
Stocks win in all environments I see? Never was the case in the past. Higher borrowing was always a drag on growth but with no growth and artificially higher stock prices, I am inclined to believe we will see Dow 20,000 under any circumstances.
Yeah, we might see 20,000 at some point soon. But after today, what is there to look forward to? China is melting down. The middle east is a mess.
I guess if you make missiles and bombs, you have a future. Not sure about much else. We see 10,000 before we see 25,000.
It's really a simple equation:
Fed hikes rates - Bankers and Oligarchs win.
Fed doesn't hike - Bankers and Oligarchs win.
That's all the analysis required.
People living under bridges will not be affected by a rate hike.
Consider the source -- Merill Lynch really doesn't do any real research, just a superficial overview of the markets with macro concepts. A raise in rates will certainly lead to bond-dumping because rising rates cause previously issued paper to be discounted compared to the new paper, interest rates all around will begin to go up because of the new Fed basis.Commodity prices will increase as inflation begins. WIth the repatriation of dollars as countries move away from the petrodollar and IMF settlements, the US will experience severe inflation and it won't be long after that.
winners Wall STreet, K Street and the uber rich....the losers...EVERYONE ELSE!
If they don't hike it'll be interpreted as weakness so commodities will drop.
how will stocks win if they tighten?
Why do "Banksters" not appear on either list? Glaring omission, unless it is meant to imply their absence means they they are WINNERS on a higher level.