How Will Interest Rate Hikes Affect the Market?

With the Federal Reserve poised to start raising interest rates in the coming months, Bloomberg took a very interesting look at how the markets have reacted to similar Fed moves in the past. There were three earlier interest rate hikes in 1994, 1999 and 2004, which gives us three recent but distinct eras to look at.

The bad news is: It doesn't look like there's a safe bet. None of the sectors Bloomberg looked at outperformed in each of the three previous post-hike time frames. But several sectors lagged their benchmark in the wake of an interest rate hike all three times. Those underperformers include:

• Automobiles and components
• Banks
• Consumer durables and apparel
• Insurance
• Retail