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Financial stocks hurt by Fed’s dot plt during the week; insurers make gains

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With Federal Reserve policymakers increasing their expectations that interest rates will stay higher for longer put a damper on many lenders and a crytpocurrency exchange this week. Meanwhile, an analyst upgrade helped an insurance company climb the most of any financial stock with market cap over $2B for the week ended Sept. 22. Other insurers also rose.

The “hawkish pause” by the Fed on Wednesday weighed on financial stocks overall, with the Financial Select Sector SPDR ETF (XLF), falling 3.3% for the week, steeper than the S&P 500’s 2.9% drop.

The decliners were led by SoFi Technologies (NASDAQ:SOFI), the digital bank and personal finance app, which sank 17%.

Coinbase (NASDAQ:COIN), the crypto exchange, slid 14%. Bitcoin (BTC-USD) gave up the week’s gains after Fed officials said they expect fewer rate cuts next year than they did in their June outlook.

Brazilian financial platform XP (NASDAQ:XP) dropped 11% in a week where the Brazilian real weakened 1.3% against the U.S. dollar.

Rocket Companies (NYSE:RKT), known for its Rocket Mortgage unit, fell 11% as high mortgage rates look likely to stay elevated, hurting the demand for mortgages.

Upstart Holdings (NASDAQ:UPST), which provides a lending platform to banks, is in a similiar situation. High rates mean consumers and businesses will be more hesitant to borrow. UPST stock dipped 10% for the week.

On the positive side, Goosehead Insurance (NASDAQ:GSHD) climbed 5.7% for the week after BMO Capital Markets upgraded the stock to Outperform on a “clearer line of sight” for re-accelerating revenue.

Selective Insurance Group (NASDAQ:SIGI) gained 5.4%.

Cboe Global Markets (BATS:CBOE) rose 5.3%.

Allstate (NYSE:ALL) increased 4.9% after the company disclosed August catastrophe losses and premium impacts of auto and homeowners insurance rate increases.

Assurant (NYSE:AIZ) stock advanced 4.6% after the insurer said it expects its global housing segment to report under $50M pretax of reportable catastrophes for Q3 2023.

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