September 26, 2021

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These were the winners during the last Fed downsizing

These were the winners during the last Fed downsizing

“The Committee remains steadfast in its often stated commitment to support the economy, as long as a full recovery is needed,” Federal Reserve Chairman Jerome Powell said during a speech yesterday at the annual Jackson Hole conference.

Although the so-called “tapping” – the gradual elimination of support purchases – may begin this year, the central bank governor has indicated that he is in no hurry to raise interest rates.

Before the economy becomes relevant, Powell said, the economy must have reached a level ‘consistent with maximum employment, inflation must have been at 2 percent, and be on the trail and barely above it for some time.

very angry

Now that the Federal Reserve plans to reduce its purchases of support, the question is which stocks investors should invest in. CNBC highlighted a handful of stocks that performed well during the previous quantitative easing in 2013-2014.

There is little historical basis for starting, and the first time support purchases were used after the Great Recession was in 2013, which came after the 2008 financial crisis.

Reducing this period is helpful, but it’s not a perfect comparison, says Ed Clesold at Ned Davis Research in a note.

Last time around, the markets spawned a so-called “losing tantrum” – a rage-reducing attack that translated directly. Investors panicked and sold bonds and interest rates rose.

The Fed is now hoping to unleash yet another anger among investors, and it can be seen in the cautious way that Powell is now laying out.

Preferred Stock

The stock-picking criteria is that the company must have seen at least a 30 percent rebound during downsizing in 2014. Of these, at least 60 percent of analysts should recommend a buy and the upside odds should be 10 percent higher. at least cent of the current price.

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Here are our analyst favourites:

Stocks from cyclical sectors such as industry and energy are well represented in the list. Southwest, Union Pacific And Diamondback Energy mentioned, the former rose as much as 82.6 percent during the Fed’s previous tightening round.

Alaska Air It is the most liked stock on the list – 93.8 percent of Wall Street analysts recommend the stock. Aircraft’s share rose 45.5 percent in 2014, and now has an upward potential of close to 40 percent.

Higher interest rates aren’t positive for growth stocks and tech names, yet big tech is also represented. Facebook social networking site And An apple About 37 percent last round.