Rising interest rates are good for banks because it allows them to charge more for lending services. However, if those higher rates squash home-buying rates or push the economy into a recession, banks will suffer. With fear high and stocks already in a bear market, investors appear to be erring on the side of caution.
The S&P 500 Index has fallen into a bear market. Inflation is running hot, and interest rates are rising. There are very legitimate fears that the global economy could get hit by a recession. Canadian banks like Toronto-Dominion (NYSE: TD), Bank of Montreal (NYSE: BMO), and Canadian Imperial Bank of Commerce (NYSE: CM) are still worth a closer look.
Source: NASDAQ
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