Direxion Daily Financial Bear 3x Shares
Once the rate hikes picked up speed in 2018, it took a toll on the banking sector as a rapid increase in interest rates reduces the value of bonds.
Are Leading Indicators Calling for a Slowdown in the United States? The United States’ economy has been firing on all cylinders for a while now, which has led to very strong gains for its major stock indices. These gains include year-to-date returns of 3.5% for the Dow Jones Industrial Average, 4.2% for the S&P 500 […]
Rapidly increasing interest rates could dampen the financial sector’s growth. A flattening yield curve could also affect the sector.
The S&P500 Financials GICS Level 1 is now down 2% in 2018 as of April 11, but the drop from the highs of the year in January is over 9%.
Since Donald Trump won the presidential election in 2016, the financial sector has soared on expectations of lighter regulations.
Interestingly for all the talk about financials this year, the S&P 500 GICS Level 1 Financial Sector is only up 19% vs. 17%+ for the S&P500 as a whole.
As the Federal Reserve begins to tighten the credit cycle, the potential impact on various equity sectors varies.
Company & Industry Overviews
The dismantling of Dodd-Frank regulations for banks should improve their profitabilities, which explains why their stocks have soared since Trump’s win.
Hedge with an inverse ETF Finally, there are exchange-traded funds. These tools may be used when seeking to hedge the market. As their name reveals, inverse ETFs go up when the market goes down, and they go down when the market goes up. Inverse ETFs allow you to seek the opposite return of specific sectors, […]