Goldman Says Tech Valuations to Remain Intact if Rates Go Higher

If Treasury yields rise, technology stocks are likely to be able to maintain their valuations while some consumer stocks may struggle, according to Goldman Sachs Group Inc.

“Price/earnings multiples in sectors with strong secular growth, such as Info Tech, show little correlation with 10-year U.S. Treasury yields since 2011; their valuations can move higher in low-rate environments (because of their long duration) or high-rate environments (because of their high near-term growth expectations),” strategists led by Ryan Hammond wrote in a note June 29.