Stock Trends

Insurance stocks love higher rates

Good morning,

Higher rates have been a big theme in The Monday Morning Playbook for months now, and following the Fed meeting yesterday it seems appropriate to take that topic to the individual stock level.

Arguably no group benefits more from higher rates than insurance stocks. So as both the short and long end of the Treasury yield curve hit 15+ year highs, it is no coincidence that we have multiple insurers on the 52-week high list this week.

This week, we’ll look at a few of those charts as well as:

• Topping patterns in homebuilders

• Stocks that used to be on our Hot List

• Private equity stocks

• Leaders and laggards in the materials sector

• and more!

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52-week highs in insurance

AJG: Arthur J. Gallagher & Co.

AJG remains one of the strongest trends out there, not just in financials, but in the S&P 500. It is consistently staying above its 200-DMA, RSI-14 remains in the bullish range and the relative chart vs. SPX just broke out.

BRK.B: Berkshire Hathaway

Everyone likes to talk about all the Apple stock Berkshire holds, but the stock is in the financials sector for a reason. First and foremost it is an insurance company and it is an insurance company that just broke out of an 18-month base.

L: Loewes

Loewes isn’t at all-time highs yet but just broke out of a base that stretched back to February. The $10 of implied upside says that new highs should be the base case.

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Homebuilders still do not like higher rates