What Hurts and Helps Equity Sectors, Fed in Focus

What Hurts and Helps Equity Sectors, Fed in Focus

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

How Interest Rates, Inflation Impact Equity Select Sectors

  • Higher short-term rates benefit financials but hurt utilities, real estate
  • High volatility helps utilities, consumer staples and communication services
  • In past three years, tech stocks have tumbled during periods of extreme volatility
  • Rising copper prices help materials and industrials but not utilities, real estate
  • Rallying copper prices are seen as harbinger of higher short-term interest rates
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Will Fed Rate Cuts Bolster Job Growth?

  • Will Fed rate cuts reinvigorate the economy, boost job growth?
  • Companies are curbing hiring as trade war puts supply chains at risk
  • Would Fed rate cuts be enough to mitigate fallout from escalating trade war?
  • Pace of new hiring slowed significantly in May, raising Fed rate cut hopes
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