Which Sectors Will Benefit from a Rates Cut

July 30, 2019

The central bank is widely expected to cut rates later this week. The hope is that this “insurance cut” will prolong the economic expansion, but how exactly will the markets react? CNBC, using a hedge fund analysis tool, looked at how various stock sectors performed in the months following every rates cut going back to 1990.

Materials and Industrials have historically been the biggest winners, with both returning nearly 9 percent on average in the six months following a rates cut. The consumer sector also performs well, seeing on average 7 percent returns. Overall, the market climbs about 4 percent in the first six months following a cut.

On the other end of the spectrum is the tech sector, which generally remains flat after a cut. Communications, health care, financials, and non-cyclical utilities also see little gain from a cut.

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