2. About 80% of the insurance funds in the favorable insurance sector are allocated to fixed-income assets. Therefore, when the interest rate enters the rising cycle, the improvement of the return on investment in fixed-income assets will enhance the company's value.
Raising interest rates means raising deposit interest and loan interest. Raising interest rates means that the liquidity of the capital market is reduced, which has certain negative factors for the stock market. However, the main purpose of raising interest rates is to curb inflation. The occurrence of inflation means that the currency depreciates at this time, which is beneficial to commodities, rare metals and banking sectors.
Commodities: For example, in recent years, the Federal Reserve has been raising interest rates, which has led to rising US bond yields and inflation. Therefore, the rising prices of many commodities are beneficial to the sectors that produce commodities such as pigs, food and consumption.
Rare metals: Because resource metals are scarce, the price of resource nonferrous metals will also rise when interest rates are raised. For example, since the beginning of this year, the share prices of many non-ferrous, coal, chemical, gold and other sectors have risen. Banking sector: interest rate hike funds flow back to banks, so the interest difference between deposits and loans of banks increases, which is the main source of income for banks, so it is good for bank stocks. However, because the bank's plate is too big, even if it is good for the stock price, it will not rise sharply.
The Fed will raise interest rates again this year, and the biggest negative for gold will be exhausted in the short term, and the price of gold is expected to rebound. Reiterate that view that the gold price rebounded aft the interest rate increase (repeatedly mentioned by Haitong Nonferrous Metals Weekly),
1) 12 the negative interest rate has been digested, and the negative interest rate has been exhausted in the short term after the interest rate increase. Referring to the trend of gold prices in the past two years, the probability of rebound is high.
2) Due to seasonal factors or less than expected in the United States 1 quarter, it is unlikely to raise interest rates continuously in the next three months, and inflation is likely to rise in 18.
3) Geopolitical issues continue to ferment, and safe-haven demand pushes up the price of gold. In the medium term, because the United States is in the interest rate hike cycle, the price of gold fluctuates. Long-term optimism about the price of gold, global currency and deficit growth, and geopolitical risks all pushed up the price of gold.