One step ahead! If US interest rates were to be cut, which industry would lead the market?

Since the number of people employed in the non-farm sector announced last week fell far short of expectations, the global market was baptized on “Black Monday,” and the market is even beginning to see that interest rate cuts on a 50-basis will be implemented in September. Furthermore, the recent sales pressure in the technology sector as a whole, combined with the rekindling of expectations for lower US interest rates, in the US stock marketThe possibility that the rotation will continueThere is. As interest rate cuts are imminent, what investment strategies should investors adopt?

The market may enter an adjustment phase in the short term, but eventually it will turn upward. The stock market usually rises towards the initial rate cut,The 1 to 3 months after interest rate cuts went back and forthShow me, and if there is no recession,After that, it began to rise again. Currently, there is a large probability that the first interest rate cut will take place in September, so considering the year-to-date increase in the major indices,There is a possibility that we are approaching an adjustment phaseThere is. Furthermore, there is a possibility that the initial rate cut this time will overlap with the prelude to the US presidential election, which is usually highly volatile. In the case of a soft landing,Stocks tend to perform well 6 to 12 months after interest rate cutsThere is. For investors, cumulative interest rate cuts and a sense of security until the end of the year after the electionReasons to buy more due to adjustments over the next few monthsIt's going to be.

Looking at the performance of the US stock market sector due to past interest rate cutsPublic utilities、healthcare、communication services、financial、daily necessitiesDefensive sectors such as these tend to show good performance.

What showed the best performance in the entire interest rate cut cyclehealth care sectorthat's it. One of the main reasons why healthcare stocks stand out during the interest rate cut cycleWe have tenacious demand that is not affected by the business cycleIt means it's a defensive stock. In addition to that, many healthcare stocksDividend stocksand at the same timeHuge share buybacksHowever, since it is known, it is extremely attractive during economic downturns. Also,Russell 2000 small cap stocksIs it between 1 and 3 months after the first rate cutExceed large stocks, even for a period of 6 to 12 monthsIncreased returns equal to or close to the S&P 500. Furthermore, information technology in general showed an upward and downward movement in the months after interest rate cuts.

Another sector worth paying attention to in the interest rate cut phase this yearPublic utilitiesthat's it. While US stocks faced a “fierce crash,” public utility stocks that flooded in in a way that went against the stock market crash became one of the few bright materials.

The S&P 500 index recorded an all-time high of 5,667.20 points on 7/16, then technology stocks were adjusted, and as of 8/6, it fell 7.5% to 5,240.03 points. However, looking at the performance of each sector,Public interest stocks have risen 4% during this timeThen,Highest performance of any sector in the S&P 500 IndexI showed it.

In times of turbulence in the market,Public interest stocks are usually a safe havenIt is often regarded as. Regardless of whether the economy is good or bad, public utilities such as water, electricity, gas, and telecommunicationsAn essential part of everyday lifeIt's a thing,Stable profits and dividendsThis is because it can be obtained, so it is less likely to be affected by market fluctuations.

● On the macroeconomic side, the number of people employed in the US non-farm sector in July was sluggish and the unemployment rate gradually rose, and concerns about the US recession increased due to the fact that the ISM manufacturing PMI in July fell below expectations, and the market generally predicted interest rate cuts in September, and 10-year government bond yields fell to around 3.8%,Dividend income from public interest stocks is even more attractiveIt became.

● Meanwhile,Rapid increase in electricity demand due to the AI boomIt also boosted US utility stocks. Last Tuesday, at an electricity market auction held by PJM, the largest transmission grid operator in the United States, electricity prices soared to 269.92 dollars per megawatt per day, rising more than 800% from the previous year, breaking the record of 174.11 dollars per megawatt recorded in 2010.