The news from Europe on the Greek debt deal continues to create volatility, jerking around bond yields and currency values, Brian Kelly, founder of Brian Kelly Capital, explained on CNBC's "Fast Money" TV show. Ultimately, yields seem likely to go higher, especially once the Federal Reserve raises interest rates.
As a result, investors should consider buying the SPDR S&P Regional Banking ETF (KRE), which will benefit from a rising rate environment, Kelly said.
If and when interest rates move higher, it will likely give a boost to the U.S. dollar, according to Steve Grasso, director of institutional sales at Stuart Frankel. The stronger dollar hurts large multinational companies but tends to be good for small-cap domestic stocks. Overall, Grasso expects the broader stock market to move lower in the short-term.
Currently, the 10-year yield is near 2.25%, which has previously acted as resistance, pointed out Guy Adami, managing director of stockmonster.com. If rates begin to move higher and break out above that range, look for the insurance companies' stocks to outperform. His top pick is Prudential Financial (PRU).
"I don't know if it's overly concerning" that rates have been rising in recent trading, said Pete Najarian, co-founder of optionmonster.com and trademonster.com. However, if rates continue to rise, it will give a boost to financial stocks. In particular, online brokerage companies like E-Trade Financial (ETFC) and TD Ameritrade (AMTD) should outperform the sector.