SPDR® S&P Regional Banking ETF

Revenue and earnings In this part, we’ll look at Welltower (HCN), a US healthcare REIT. Welltower’s revenue growth slowed from 15% in 2015 to 11% in 2016. The growth was driven by all of its segments, through rental income, resident fees and services, interest income, and other income. Its operating costs and other expenses (including interest expenses) […]

As per the latest JOLTS report, about 3.2 million Americans quit their jobs voluntarily last month. This is an increase of 0.1 million from the previous month.

With so many positive tailwinds for the financial sector, how can investors use ETFs to target this growth?

In addition to the promising signs of the financial sector passing the rigor of this stress test, talk of deregulation makes the financial sector even more attractive.

Despite and a rocky 3-month period, starting in late February/early March, the financial sector has really taken a positive outlook over the past ~month and some signs point to a continuation of this recent success.

Apprehensions over climate change, an emphasis on global pension funds over the integration of ESG in their investments, and new markets will fuel demand for this type of bond.

For years, Puerto Rico has been using tax incentives to attract corporations to do business in its region. Over the last four decades, the agricultural economy has shifted toward the manufacturing and services sectors.

Equity markets trended lower after the Fed’s March meeting minutes were reported. In the minutes, some FOMC members sound concerned about the rise in equities.

While the Dodd-Frank Act was passed to avoid another financial crisis, it has crippled banks’ profitabilities over the years due to higher capital requirements.

Barack Obama signed the Dodd-Frank Act into federal law in 2010.

Another factor that impacts small-cap stocks’ performance is the yield curve. The yield curve has remained on the flatter side since the recession.

The dismantling of Dodd-Frank regulations for banks should improve their profitabilities, which explains why their stocks have soared since Trump’s win.

The CBOE Volatility Index suddenly rose 6.0% on November 9, 2016, after it was clear that Trump had unexpectedly clinched the election.

The S&P 500 returns for a second-term president have been somewhat better than a first-term president, which is one reason for the incumbency factor.

The 2016 US presidential election is scheduled for November 8, 2016. This election will mark the 58th quadrennial US presidential election.

Market participants struggle to reassess the macro outlook based on incoming data. The BlackRock Macro GPS tool exploits more sources of information.

The United States Census Bureau published the US retail sales report for June on July 15. Retail sales rose 0.6% in June on a month-over-month basis.

The US dollar index, which measures the strength of the US dollar against the major currencies, was on a bull run on July 11.

The non-manufacturing PMI is published by the ISM. It rose to the highest level since November 2015. The non-manufacturing PMI for May rose to 56.5.

Rate-sensitive XLF saw the largest outflows among GICS sector ETFs on a weekly basis. But it was also the biggest fund flow loser in the first half of 2016.

New factory orders in the US fell by 1.0% in May—compared to the forecast of a fall of 0.8%. The factory orders for April were revised down to a rise of 1.8%.

With Brexit out of the way, the focus will shift to domestic data releases. This week will see the release of US final GDP and US consumer confidence.

During last week’s volatile trading session, investors pulled money out of all but two US GICS Sector ETFs. All of the sectors closed in negative territory.

The US dollar index was trading on a lower note on March 31, 2016, at 2:30 PM EST as unemployment added further uncertainty to the US rate hike.

With assets under management of $1.7 billion, KRE is the largest and most heavily traded regional bank ETF in the United States.

The ADP employment report often acts as a precursor to the Non-Farm Payrolls release by the Bureau of Labor Statistics, which is scheduled for March 4, 2016.

Shares of KRE rose 2.1% last week. Year-to-date, shares of KRE have plunged 16%, dragged down by low oil prices and a slowing economy.

The 4Q15 GDP increased at an annual rate of 1.0% against a forecast of 0.4%. The banking sector took positive cues from the GDP report with major gains in banking stocks.

While I don’t have a crystal ball, here are three things I believe all investors need to know about returns in 2016.

Q. Tell us more about your outlook for electric vehicles.

Among the 214 13F filers holding the stock, 62 funds reduced their exposure to KRE, 49 sold all their holdings of the ETF, and 30 created new positions.

The SPDR S&P Regional Banking ETF (KRE) targets US regional banks. It seeks to track the performance of the S&P Regional Banks Select Industry Index.

Credit growth has started to slow in the Us. From the 12% annualized growth rate of commercial and industrial credit in 2014, the rate is currently around 10.8%.

Banks have seen compliance costs rise since the Dodd-Frank Act regulations took effect. For small banks, it’s been harder to absorb these costs.

Within XLF, banking stocks have returned -5.3% YTD as of November 13, while regional banks have returned -1.6% YTD, outperforming the financial sector.

KRE seeks to track the performance of the S&P Regional Banks Select Industry Index,
particularly targets regional banks in the US. Shares of KRE have gained 11.4% YTD.

Financials tend to do well when interest rates rise. Rates usually rise when the economy is improving.

Competitors have outperformed Prosperity Bancshares based on forward PE and PBV. The ETFs have outperformed Prosperity Bancshares based on price movement, PE, and PBV.

Currently, First Niagara Financial Group is trading at 1.5% above the 20-day moving average, 9.0% above the 50-day moving average, and 16.8% above the 200-day moving average.

Based on PE and PBV, Popular’s competitors have outperformed. The ETFs that invest in Popular have also outperformed Popular based on price movement, PE, and PBV.

Year-to-date, Popular’s price movement is a mixture of ups and downs. After its 3Q15 earnings report, Popular stock fell 3.6% and closed at $30.26 per share on October 23, 2015.

The price-to-book value ratios of Synovus, BB&T, SunTrust Banks, Regions Financial, and Capital Bank Financial are 1.43x, 1.19x, 0.93x, 0.77x, and 1.37x.

Small-cap banks have been underperforming due to the yield curve that has been flattening since the start of 2014.

Dividend stocks have underperformed this year so far. The dividend yield measures dividends payed by a company in the last 12 months relative to its share price.

The yield curve has steepened a bit compared to where it was a week or even a month ago. Investors should consider the yield curve slope an indicator of bank performance.

Investors are ready to pay a premium to own shares. Stock valuations are rich. They’re sensitive to rising interest rates. Don’t abandon them though—just be selective.

Banks benefit from a steeper yield curve, which allows banks to lend on higher long-term rates and borrow on lower short-term rates. This boosts banks’ margins.

During 1Q15, Regions Financial (RF) repurchased $102 million of common stock—completing its $350 million 2014 repurchase program.