To see the impact of higher inflation and higher interest rates on companies, just look at the earnings release for CarMax this morning.
For example, higher rates are generally bad for REITs beause REITs rely on debt financing.
Higher rates also mean increased borrowing costs for utilities, which carry a lot of debt because they use a lot of capital.
The problem is, energy and material stocks have already been rising due to higher oil and a still strong economy.
Other potential beneficiaries of higher rates with a strong economy are defensive stocks, which tend to be less interest rate sensitive, like Kroger or Walmart .
Organizations:
Energy, Communication, Kroger, Walmart
Locations:
Meta