It turns out that a long pause between Federal Reserve rate actions is historically good for stocks, according to LPL Financial.
The pause, which has reached 280 days, is the second-longest in modern market history, LPL noted, behind only the 2006-07 pause that reached 446 days.
"Long pauses are typically good for stocks, and the gains achieved since the Fed's last hike in July 2023 are consistent with recent history," said Jeff Buchbinder, chief equity strategist at LPL Financial.
"The pace and rise of the S & P 500 during that time are in line with what we are seeing now."
Still, the strategist observed that the sectors that have historically outperformed during long pauses are financials and energy, which generally return 15% for the period.
Persons:
LPL, Jeff Buchbinder, Buchbinder
Organizations:
Financial, Investors, LPL