Powell put drives up interest-sensitive stocks (NYSE:WGO)

Fed Chairman Jerome Powell’s speech on Friday in Jackson Hole, Wyoming, significantly increased the likelihood of an interest rate cut in September and brought positive price increases to interest-sensitive stocks on Wall Street.

At an economic symposium, Powell confirmed what other Fed members have indicated in recent weeks. With inflation approaching the Fed’s 2% target and weakness in the housing and labor markets, “the time has come” for loose monetary policy, Powell said, adding that the Fed “does not seek or welcome a further slowdown in labor market conditions.”

His comments sent U.S. Treasury yields lower and stock prices higher. The gains were led by interest-sensitive stocks such as RVs, motorcycles and boats, whose demand is highly dependent on interest rates. Since most of these stocks are financed, the decision whether to buy an RV, boat or motorcycle depends more on the monthly payment than the list price. As a result, shares of Winnebago (NYSE: WGO), Thor Industries (NYSE: THO), LCI Industries (NYSE: LCII), Polaris (NYSE: PII), MarineMax (NYSE: HZO), OneWater Marine (NASDAQ:ONEW), Harley-Davidson (NYSE:HOG), Malibu Boats (NASDAQ:MBUU), Brunswick Corp (NYSE: BC) and Mastercraft Boat Holdings (NASDAQ:MCFT) are among the most powerful names in the recreational vehicle segment.

Lindblad Expeditions (NASDAQ:LINDSAY) and other high-profile travel companies also receive the “Powell Put”, with above-average gains for Viking Holdings (NYSE: VIK) and the cruise companies Norwegian Cruise Line Holdings (NYSE: NCLH), Royal Caribbean (NYSE: RCL) and Carnival Corp (NYSE: CCL).

Even though earnings are not as impressive, the optimistic outlook for US interest rates and the positive impact on borrowing and spending are giving shares of home furnishing companies like RH (NYSE: RH), Wayfair (NYSE:W), Williams Sonoma (NYSE: WMS) and Beyond (NYSE: BYON) and retailers such as Stitch Fix (NASDAQ:SFIX) and ThredUp (NASDAQ:TDUP).