XLF Decline Post Rate Cuts: The Financials Select Sector ETF (XLF) declined by an average of 5.6% in the six months following the last three monetary policy pivots.
Credit Delinquency Risks: Rising credit card delinquencies, now at 10.93% for severe cases, pose a significant risk to financial firms within XLF, potentially amplifying their underperformance as rates decline.
Utilities Sector Advantage: Utility companies tend to outperform during rate cuts due to reduced debt payments, with the sector seeing a ~6% spread increase compared to the S&P 500.
Begin exploring Smartkarma's AI-augmented investing intelligence platform with a complimentary Preview Pass to:
Unlock research summaries
Follow top, independent analysts
Receive personalised alerts
Access Analytics, Events and more
Join 55,000+ investors, including top global asset managers overseeing $13+ trillion.