The Federal Reserve is in the news again. At their latest meeting yesterday they kept interest rates the same but all signs are pointing to the 1st cut in rates, in the near future.
When the Fed does start to cut rates, which stock sectors benefit the most? According to an article in Yahoo Finance, the following sectors are the top candidates:
- Real Estate
- Utilities
- Homebuilders
- Consumer Discretionary (hotels, restaurants, automobiles etc)
- Technology
What about stocks in general? How do they fare when interest rates start getting cut? The answer to that according to an article in Bloomberg is, depends. The article reviewed the last 22 rate cut cycles going back to 1928 and found the following:
- A 17% average gain over the next 12 months if there was not a recession at the time of the cuts or during the next 12 months.
- A 8% average gain over the next 12 months if there was a recession.
If a 'soft landing' is in our future we may have a strong market over the next 12 months.
What do you think?
Submitted March 21, 2024 at 05:07AM by Swing_Trader_Trading https://ift.tt/R3ahG59
