Traders Need a New Stock Market Playbook for These Rate Cuts

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Bloomberg أخبار

Consumer Staples,Interest Rates,Federal Reserve

(Bloomberg) -- Wall Street traders have a unique challenge in placing bets on the stock market now that the Federal Reserve has started cutting interest...

-- Wall Street traders have a unique challenge in placing bets on the stock market now that the Federal Reserve has started cutting interest rates: History is no longer a guide.California’s Anti-Speeding Bill Can Be a Traffic Safety BreakthroughThe classic trading playbook for when rates are coming down is to buy stocks in sectors that are considered defensive in nature because their demand is impervious to economic conditions, like consumer staples and health care.

David Lefkowitz, head of US equities for UBS Global Wealth Management, also likes financials, as well as pockets within the industrial sector closely tied to a strong economy.That positioning runs counter to what history would suggest.

“You’re going to have a euphoric consumer,” said Phil Blancato, chief executive officer at Ladenburg Thalmann Asset Management. “Seeing the cuts come down and seeing an opportunity to go out and get a mortgage will spur spending whether it’s the housing market, the auto market or just year end spending.”

“It’s hard to know if we’re front loading all the good news in utilities,” Bailey said. “It feels like we’re probably not going to see another wave of outperformance for those.”

 

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