Goldman Sachs (GS) forecasts interest rates could rise more than expected…
The investment bank’s chief economist, Jan Hatzius, thinks that the U.S. Federal Reserve will increase interest rates four times in 2022.
This is higher than what Jerome Powell and the Fed originally told us. And it could lead to more paid ahead for the stock market in general.
You see, when rates rise, borrowing money becomes more expensive and growth stocks (like tech) take a hit.
Goldman anticipates rising inflation and a tightening job market will put greater pressure on the economy this year.
Hatzius explained that these two factors have made the central bank more sensitive to potential risks. As a result, he noted that the U.S. should see rates rise in March, June, September, and December.
So, given the fact that the broader market anticipates some headwinds will continue throughout the year, if not longer, many investors are shifting over to stocks that not only provide dividend yields… But also benefit from a higher interest rate environment.
This includes bank stocks like Wells Fargo (WFC). Wells Fargo is a multinational investment bank and financial services firm.
And it’s also one of the best ways to capitalize on rate hikes…
Banks, insurance companies, and brokerages traditionally benefit from higher rates. This is because, despite inflation, economic improvements are underway. And higher rates often coincide with this trend.
As economic activity gradually gains momentum, it means potential borrowers are more likely to receive loans. It also indicates that those that do pursue loans will be able to pay off the interest associated with them. In turn, it lowers the risks for banks.
And this has worked out for the investment bank in recent months. In its January earnings, Wells Fargo said its fourth-quarter earnings per share were $1.38 compared with the expected $1.11. The company’s revenue was $20.86 billion, also greater than the anticipated $18.79 billion.
This strong quarter pushed the investment bank to release yet another $875 million in loan-loss provisions as well – boosting shareholders’ overall earnings payout in the process.
And now that interest rates could rise more than expected, these improvements should help Wells Fargo report even greater momentum in the months ahead – possibly driving stronger profits for investors.
Marc Chaikin’s newest prediction has gone viral, with 1.5 million views.
According to Chaikin, who spent 50 years on Wall Street, a historic event in 2022 will cause a massive shift in the wealth divide.
“This will affect anyone who owns stocks,” says Chaikin, who accurately predicted the 2020 Crash. “Most people will never see it coming, for the simple and sad reason that nobody wants this to happen. Nobody.”
Chaikin predicts a new form of technology will disrupt everything.
“This is all a direct result of 2020,” he adds.
Chaikin – a popular guest on Jim Cramer’s Mad Money – has never shied away from sharing his controversial predictions.
Famously, he once predicted the collapse of Priceline.com in a debate on CNBC. When the stock went on to collapse 100 points overnight, his opponent took to the air the next day to admit that Chaikin was right.
Now, Chaikin is pointing to a huge change in the way thousands of companies will need to do business in 2022.
It will affect everyone from Apple to Amazon, he says.
“The best way to prepare is to simply get the facts for yourself and see what’s coming,” says Chaikin, noting that even 11 of the world’s best-known billionaires are getting ready for the shift.
With Marc Chaikin’s permission, we’re posting his full, brand-new warning to the public on our website here.