CME stock is hot, could catch a chill on lower interest rates, Barron’s says

Exchange operator CME Group is riding high right now, and so is its share price, Billl Alpert writes in this week’s edition of Barron’s. After the Federal Reserve yanked interest rates from near zero to over 5% in two years, it spurred record trading volume in CME’s interest-rate futures. That made the company into the U.S.’s most-valued exchange operator, with a market cap near $80B. CME is a well-run exchange, with other products for handling risk in stocks, energy, agriculture, and, most recently, cryptocurrency. Still, it was the Fed’s rate hikes that drove its recent growth and stock valuation. When it becomes clear that rates are heading down, CME stock could lose its premium valuation and fall from its current price of $215, the author notes.