Recently, the major U.S. banks disclosed that they have been profitable on an operating basis, during January and February. Many commentators have attributed this to the steep yield curve where the banks are borrowing at low rates and lending at much higher rates. Researchers at Bespoke Investment Group have looked at the performance of various sectors one year before and one year after a peak in the yield curve (yield on ten-year treasury minus yield on three month treasury) going back to 1962. The current yield curve maxed out on November 13, 2008.
What they found was energy sector was up 78% of the time for an average of 10.7% one year before and 89% of the time for an average of 16.1% one year after the peak in the yield curve. Materials sector was up 67% of the time for an average of 9.7% one year before and 78% of the time for an average of 11% one year after the peak in the yield curve.