rising rates means higher deposit costs, losing money on Treasury bonds, seems pretty illogical that banks would be higher other than they are trying to mask weakness in the underlying market
You really don't have a clue what your doing do you? You've been shorting the market and betting against the trend the whole year and you wonder why you're losing money. Higher rates means MORE profits for the banks. Lower rates means less profits for the banks.
Sentiment: Strong Buy
In regards to Cramer, um no. That's not how you should think of it and Cramer is retarded. Financials and Tech move together because they are both high risk sectors in the economy. No wonder he sounds like a #$%$ it's because he believe moronic things. Buy and hold Cramer! It's all you have the brain power to do successfully!
Rising rates brings in more deposits, increasing the money supply for lending as well as increasing the profitability of those loans. The low interest rate environment we have was no friend of the lender, it was a friend to the borrower. The catch was that banks remained reluctant to lend because profitability remained low keeping the supply of loans well below the demand of the borrower.
A few things- 1 January Effect......bonuses, stock options and end of year dividends getting reinvested
2- Fund managers scared of missing the boat are piling into last year's top performers
3- Wednesday's action was the ringing of the dinner bell for retail investors to come back into the game. Retail investors look at tech and financials first because they are not complex enough to look at sectors like pharma, energy, consumer cyclical ect....
As far as number 3 goes, we are now entering the phase in this bull market where institutional investors that have built up massive long positions over the last 4 plus years will begin winding down those positions to retail investors and funds that cater to retail investors. This process may go on for sometime, but eventually a 20-35% correction will unfold leaving retail holdig the bag once again.
Rinse and repeat....this is my third go around. They got me the first time (1999-2000) I was 21 years old and dumb as young. I was more ready for their game in 2008, was able to hold onto to some profits....this time I plan to make my fortune by profiting on the short side!