Interest Rate Sensitive Stock

A stock which is sensitive to changes in interest rates. These are usually companies with high amounts of debt (for example utilities) or highly financially leveraged, like a bank.  Banks usually flourish when interest rates are low, due to a strong economy and low default rates (though interest rates may also be low in times of distress due to central bank intervention) and face more trouble when interest rates are higher. Brokerages usually make more money when interest rates are low and the stock market is generally bullish, with high levels of turnover and activity leading to more commissions for the brokerage (However, low interest rates may not coincide with a strong economy or a bull market, for example, the 1990s in Japan.).