Libor Keeps Rattling U.S. Stocks Even After Debut of Its Replacement
- Companies with large share of floating-rate debt hit hardest
- Goldman Sachs makes case for stocks with strong balance sheets
Photographer: Matthew Lloyd/Bloomberg
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The London interbank offered rate is wreaking havoc on U.S. equity markets, refusing to go quietly into retirement.
Shares in companies with a significant portion of floating-rate debt have been fluctuating in line with short-term borrowing costs tied to Libor, according to a study by a Goldman Sachs Group Inc. team of strategists including Ben Snider and David Kostin. Rising rates are only a “modest” threat to the market at large, according to the analysts, but they’ve been instrumental in delineating between winners and losers in 2018.