-- The possibility of a more hawkish tilt by the Bank of Japan at this week’s policy meeting means it may be too early to call time on the rallies in banks and other value stocks.Big Tech Surges in Late Hours on Blowout Earnings: Markets WrapJavier Milei Fuels Wild Rally That Makes Peso No. 1 in World
“Ueda will take into consideration the impact of the yen’s weakness — while a rate hike at this meeting is unthinkable, he may drop a hint of a future hike,” said Masayuki Murata, general manager of balanced portfolio investment at Sumitomo Life Insurance Co. “This is why bank shares have been rising lately.”After outperforming for the past couple of years, concerns had grown that the value-stock trade had run its course with the BOJ ending its negative interest rate policy in March.
Tighter policy would be a boon for banks, which benefit from higher rates on loans and investments, as well as the broader scope of value stocks. While the appeal of growth stocks is based on future earnings, value stocks are prized for their current cashflows, making them less susceptible to higher rates.
Momentum is underway for these two Canadian stocks, and yet both still trade at share prices that are quite low given their future growth. The post Underpriced and Overlooked: 2 Canadian Stocks Ready to Rally appeared first on The Motley Fool Canada.
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