Meanwhile, the rising interest rate environment is also good for net interest margins for banks and more so for insurance companies. Given the latest strength in the U.S. employment data, many anticipate the Federal Reserve to hike rates at least three times this year. Yields on benchmark 10-year Treasuries have pushed higher, which is also keeping the yield curve upwardly sloping.
Insurance ETFs, sensitive to Treasury yield gyrations in their own regard, are often responsive to rising bond yields. Among industry ETFs that respond positively to rising Treasury yields, perhaps only regional bank funds have been more desperate for rising rates than insurance ETFs.
“Expect multinationals to scrutinize the international rules to manage their effective tax rates; greater clarity on the taxation of foreign assets should help inform spending plans,” according to BlackRock. “Beyond that, the details matter and vary by sector and even company, giving stock pickers room to capitalize.”
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