Janet Yellen Panics the Market
Like a squall out of a clear sky… Janet Yellen sent investors under the awnings Tuesday:
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat.”
In reminder: Falling rates generally equal rising stocks. Rising rates generally equal falling stocks.
Ms. Yellen’s rains gave the Nasdaq a quick 300-point drenching.
That is because many technology stocks are “growth” stocks. These stocks have grown the stock market into a towering oak.
Growth stocks are uniquely sensitive to rising interest rates. Explains Mr. Peter Tchir of Academy Securities: