High interest Rates, Your Portfolio and Next Steps

On Wednesday, the Federal Reserve is anticipated to raise interest rates by 75 basis points. How will the rate increase affect your investing portfolio? 

Depending on your investment holdings, the interest rate increase could significantly impact your portfolio. Higher interest rates could also lead to a decrease in the stock market.

The two-year treasury rate listed above is now 3.85 and was around half a percent one year ago. The hike this week will increase the cost of borrowing and slow economic growth. 

Some companies, more than others, will be impacted. 

2 year us treasury bond yields rising chart year 2022

We at MarketGauge have already made considerable adjustments to our trading style and not just our portfolios.

We are using a blended approach.

And while SPDR S&P Regional Banking ETF (KRE) might have a reputation for being a prodigal son, investors would be wise not to overlook it. 

KRE, a vital part of the Modern Family, plays an essential role in measuring the health of the financial system and the overall economy. 

Regional banking stocks primarily make their money by commercial and personal lending, so as rates rise, these banks will become more profitable. 

They do not make profits in derivatives. Rather, they tend to be heavily involved in lending transactions.

On the chart: 

  1. KRE closed over the 50-DMA. It returns to an unconfirmed recuperation phase that needs to confirm with another close above it tomorrow.
  2. KRE outperforms the SPY
  3. Real motion is showing positive upward momentum

KRE is undervalued with plenty of upside potential.

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Stock Market ETFs Trading Analysis & Summary:

S&P 500 (SPY) Confirmed bear phase 384 support with resistance at 395 

Russell 2000 (IWM) Support at 178 and resistance 182

Dow Jones Industrials (DIA) Confirmed bear phase 308 support and 311 resistance

Nasdaq (QQQ) support at 288 and resistance at 293

KRE (Regional Banks) Support at 62.67 resistance at 64.77 

SMH (Semiconductors) Confirmed bear phase and support at 202.48 and resistance at 207.20

IYT (Transportation) 217 support and 222 resistance

IBB (Biotechnology) Support at 120.73 and 122.60 is resistance

XRT (Retail) Support at 61 and 64 is resistance

Twitter: @marketminute

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.

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