April 28, 2006
Financials Set to Outperform?
The Financial SPDR (XLF) and Regional Bank HOLDR (RKH) were both prominently on my new highs list. These two ETFs have been doing about as well as the S&P 500 since the bottom of the bear market (October 2002) — no better, no worse. I’m watching for a breakout in relative performance as money rotates into the financials.
(If you don’t understand what “relative performance” is, read this chat transcript.)
Cat: | Time: 9:22 am (utc+8)
April 28th, 2006 at 8:05 pm
This is definitely one to watch. Think it could give us another “fake” considering the US’s internal economic health?
April 28th, 2006 at 8:47 pm
Tom: Maybe, but I found it Notable that BAC, JPM, and WFC (and many other financial stocks) all made new highs.
April 29th, 2006 at 9:04 am
Based on the USD slide, I wonder if some people anticipate a higher rate increase? Hmm.
April 29th, 2006 at 3:16 pm
Tom: the USD is sliding in part because Ben Shalom said it’s time to pause the rate increases … the whole countertrend bounce was driven by the rate-tightening cycle, which is now apparently at an end. “The probability of an additional increase at the June 28-29 confab is less than 25%, down from 65% prior to the chairman’s JEC testimony.” — Barron’s
April 29th, 2006 at 6:33 pm
Interesting, I had no idea his middle name was Shalom.
April 29th, 2006 at 10:15 pm
Eyal: I’ll send you $5 if you can tell me Alan Greenspan’s middle name.
April 30th, 2006 at 4:47 am
Hmm.. Alan Exuberance? ;-)
April 30th, 2006 at 5:52 am
CM: I understand that, so now the financials are going to rally because the rates are pausing but the dollar continues its slide. Do you think Bernanke will at some point raise rates again to halt the dollar slide in the guise of fighting inflation? I assume that higher interest rates will affect the financial stocks negatively for sure thereby leading to a potential “fake” again. :-)
Then again RKH is in a uptrend since 2003.