- The pervasive narrative that higher interest rates are bad for growth stocks is not supported by a historical analysis of 10-year U.S. government bond rates and Nasdaq weekly returns.
- While higher rates should translate into higher borrowing costs that reduce equity valuations, rates generally rise when economic growth is expected to improve.
- Higher growth estimates seem to outweigh concerns over borrowing costs as higher price-earnings multiples are typically associated with higher rates.
For further details see:
Higher Interest Rates And Growth Stocks: An Analysis