Shares of several companies in the retail and consumer discretionary sectors, including AMC Entertainment Holdings Inc (NYSE:AMC), GameStop Corp (NYSE:GME) and Genius Brands International Inc (NASDAQ:GNUS), are all trading lower as stocks continue to sell off in anticipation of Fed policy tightening in 2022.
Retail-favorite stocks have suffered setbacks amid anticipated Fed policy tightening, what with shares of AMC falling 44% and GameStop lower by 37% over the past month. The Federal Reserve is expected to start hiking interest rates and reducing the amount of bonds it buys each month. The Fed may also begin cutting the nearly $9 trillion in assets it's holding.
The broader market has been pressured by a recent rise in Treasury yields, together with Fed tapering concerns. The 10-year US Treasury yield is hovering around a two-year high at 1.785% Monday morning, which has pressured valuations. When interest rates rise, the value of future cash flows is reduced for growth stocks, which in turn lower the value of the stock.
