Why Tom Lee Thinks We Could See S&P 15,000 by 2030
Odd Lots
Unintuitive Connection Between Valuations and Rates
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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