In the wake of the Fed’s interest rate increase this week, Goldman Sachs now expects the Fed to raise interest rates by 50 basis points each at its May and June meetings, which might dampen investor sentiment considerably in the near term. However, stocks closed higher yesterday, absorbing Federal Reserve Chair Jerome Powell’s warning of more aggressive hikes.
Amid the volatile market, strong momentum stocks could be safer bets for investors since their momentum might continue for some time. Investors’ interest in momentum stocks is evidenced by the Virtus Terranova U.S. Quality Momentum ETF’s (JOET) 5.8% returns in the past month, compared to the SPDR S&P 500 Trust ETF’s (SPY) 4.7% returns.
