By Angela Harmantas
Will the US Federal Reserve raise interest rates for the first time in several years? We’ll find out this week when the Feds convene to make a momentous decision. Today on Before the Bell we’re looking at two key sectors that potentially have a lot to lose – and gain! – if the Feds increase rates – here’s what you need to know today:
The US Federal Reserve is due to meet on September 16 and 17 to decide whether to raise interest rates for the first time in seven years. A rate hike could send another punishing shockwave through global markets (even in the anticipation leading up to the announcement, gold prices fell again), but it may not be all-around bad news for investors. Here’s an article in USA Today that outlines the winners and losers if interest rates increase – good news for home buyers and sellers, not a great outlook for savers. We’ll be covering the buildup and fallout from the Fed’s meeting this week, so keep watching this space.
It may be another rough week ahead for gold. Spot prices fell on Monday morning to one-month lows of US$1105.40 in anticipation of the US Federal Reserves’ meeting this week. The Ubika Research Gold 20 Monthly, however, managed to outperform the TSX Gold Index benchmark, slipping 10.6% and 13.3%, respectively. A few highlights: Romarco Minerals was replaced by low cost gold producer Lake Shore Gold; Alamos Gold gained 9% after completing its purchase of another 8 million shares of AuRico Gold; and Pilot Gold shared positive results from its 2015 program at its past-producing Kinsley project in Nevada. I spoke with Jon Case about his outlook for the gold market in 2015, so look for that interview this week on SmallCapPower.
What are your spending habits when the economy isn’t doing terribly well? I tend not to change my regular pattern that much, but some people drastically cut back on their spending and with good reason. Our investing idea today takes into account the effect that the pending US rate hike and struggling Canadian dollar may have on consumers: we’re looking at 5 discount retail stocks that could outperform in a struggling economy. You might see some familiar names (Overstock.com and Coupons.com Inc., for example) but some – such as North West Company Inc. – are new to me despite having market penetration across the Americas. Would you be interested in hearing more about retailers and consumer products on SmallCapPower? Let us know with your tweets and comments.
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
Interested in previous Before the Bell Blogs Here’s the archive link.
