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Why Tom Lee Thinks We Could See S&P 15,000 by 2030

Odd Lots

Unintuitive Connection Between Valuations and Rates

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The connection between valuations and rates reveals an intriguing relationship where companies can thrive even as treasury yields double. Cash-rich mega corporations benefit from higher rates as it directly adds to their earnings due to lower debt. Furthermore, higher rates create a moat that enhances competitiveness for established players but poses a challenge for new entrants. This dynamic suggests that higher rates act as a centralizing force for capital-rich entities while penalizing those with limited capital, affecting capital markets activity.

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