Today we received the much-awaited minutes from the January Federal Open Market Committee (aka the Fed, chaired by Janet Yellen). Here’s what we learned:
$1 An interest rate hike still remains highly likely. In its most basic sense, this keeps banking stocks particularly attractive this year.
$2 An early hike means multiple hikes this year. Any company that relies on debt (like energy partnerships, miners) may be hurt while banks reap all of those benefits.
$3 Bonds may become more attractive as compared to dividend-paying stocks as yields increase. Indexes that track bonds may be something to position for later in the year (or now if it’s cheap).
Though banks did not do all that well today after the minutes release, we should see their upward trajectory continue. The S&P ended slightly lower, the Dow set new highs. The sky is blue…