In case you needed more evidence that the Fed is playing an outsize role in equity markets, I present to you the following chart. This shows the relative performance of banks and utilities versus an interest rate expectations proxy (bottom pane). When rate expectations go up, utilities fall, and banks rise. When rate expectations go down, utilities soar, and banks fall.
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Jeremy Jones, CFA is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. Jeremy is a contributing editor of youngresearch.com.