XLK - How Low Interest Rates Have Led To Increased Market Concentration
Corporate profitability is inversely related to the level of interest rates.
In other words, as interest rates fall, corporate profit margins expand. And as interest rates rise, profit margins contract. It should be no surprise, then, that corporate profitability has generally risen and fallen in an inverse relationship with interest rates over the last 70 years.
Source: Simcha Barkai and Seth Benzell, "70 Years of Corporate Profits"
Lower interest rates do not benefit all businesses equally. Larger companies which have stronger balance sheets and command significant market share benefit more than smaller, newer entrants into