These stocks are typically the best bets when the Fed jolts the economy with three rate cuts

  • 📰 CNBC
  • ⏱ Reading Time:
  • 42 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 20%
  • Publisher: 72%

Malaysia News News

Malaysia Malaysia Latest News,Malaysia Malaysia Headlines

The stage appears to be set for some stocks to shine after the Federal Reserve's third rate cut and its signal to stop from now.

The three-and-done approach was used on two occasions in history — between 1995 and 1996 and in 1998. The Alan Greenspan-led Fed slashed rates by a total of 75 basis points, during both periods to combat an economic downturn and successfully prolong the expansion.22% higher on average a year after the third cut, CNBC analysis found.

CNBC, using hedge fund analytics tool Kensho, found that information technology stood out as the best-performing sector after the central bank cut rates three times and paused, surging a whopping 66% a year after the third cut on average. Energy and industrial stocks both jumped about 24% on average during the same period.

It's not surprising that cyclical stocks have historically enjoyed the biggest boost from Fed's rate cuts. As monetary easing is designed to jolt the economy, investors tend to gravitate towards stocks traditionally correlated to economic growth. To be sure, the tech sector's stunning pop in the 1990s happened when there was a rapid rise in U.S. tech stock valuations at the height of the dotcom bubble. So the Fed put should have less of an impact on the group this time.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 12. in MY
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Fed set to cut rates, GDP report, Apple earnings: 3 things to watch in Wednesday's marketsInvestors will brace for a slew of market-moving events on Wednesday with the Fed's rate decision, key GDP reading and earnings from Apple and Facebook. Iu
Source: CNBC - 🏆 12. / 72 Read more »

Asia stocks set to dip ahead of Fed interest rate decisionThe Fed is largely expected to slash interest rates by 25 basis points later this week. That would mark its third rate cut for this year. Why dip ? Fed will cut the rate
Source: CNBC - 🏆 12. / 72 Read more »