So the current bear market already is longer than average, albeit a bit milder. And right now, it seems like it might take forever to gain that much ground. Nevertheless, the odds are good that we are closer to the end than the beginning of this particular bear market. Traditionally, banking is one of the premier interest-rate sensitive stocks. Money is the raw material for banking.
Banks pay to get it, and charge a premium to lend it out.
When short-term rates fall, banks can improve their profit margins, at least temporarily. Nevertheless, on Wall Street, stereotypes die hard. Another traditional rate-sensitive group is electric utilities, which are traditionally big borrowers. Lower interest rates means lower borrowing costs, particularly in the short-term money market. In part, this may be because banks and utilities are also economically sensitive stocks.