What Happens When Interest Rates Normalize?
1. Poor relative performance of consumer discretionary stocks (for example: Home Depot, McDonalds, and Target)
2. High-quality corporate bond yields would increase first, followed by an increase in lower-quality “junk” bond yields
3. Material weakness in the U.S. Dollar
4. A rise in general inflation expectations
(Source: BCA Research, http://bcaresearch.com, 2013)