|Bid||57.57 x 900|
|Ask||57.62 x 800|
|Day's Range||56.86 - 57.94|
|52 Week Range||42.34 - 77.95|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-23.77%|
|Beta (5Y Monthly)||1.26|
|Expense Ratio (net)||0.10%|
Exchange-traded funds that track the financial sector outperformed the broader market Wednesday, extending a winning streak that suggests investors are wagering on an economic recovery that could help propel financial shares higher. Financials were the best performer among the S&P 500's 11 categories. The Financial Select Sector SPDR Fund was trading 3% higher in morning action. The Vanguard Financials ETF was 3.1% higher, and the SPDR S&P Bank ETF jumped more than 4%. Financials have taken a beating as investors worry about the impact of a stalled economy in the wake of the coronavirus pandemic and the pain from a plunge in oil prices on companies' ability to service their debt. Rock-bottom interest rates don't help banks, either. XLF is down more than 22% in the year to date. But on Wednesday, technology companies sold off, sending the Nasdaq Composite Index down nearly 1%. If investors are swapping high-flying bets for stocks considered undervalued, it may suggest more confidence in the economic outlook in the aftermath of the viral outbreak.
Read about the most important benchmarks that can be used to track the banking sector, and why banking benchmarks tend to be specific to sub-sectors.
As stocks are soaring, the wealth effect should be realized by investors. These cyclical sector ETFs and stocks appear as good picks in this scenario.
Global banking firm J.P. Morgan has reached new highs despite the Federal Reserve cutting interest rates, which could put the banking sector in a bind as lower rates could affect their lending businesses. Analysts like Miller Tabak’s equity strategist Matt Maley said that as bond prices climb, banking stocks could come under pressure. Investors have been piling in on bonds the last few months as a go-to safe haven shift, which has caused Treasury yields to fall and bond prices to climb.
As big banks continue to report their second-quarter earnings this week, some are already expressing concern with respect to the possibility of rate cuts by the Federal Reserve through 2019. In particular, profits could shrink as a result of lower interest rates, which could put the Direxion Daily Financial Bear 3X ETF (FAZ) in play. FAZ seeks daily investment results that equate to 300% of the inverse (or opposite) of the daily performance of the Russell 1000® Financial Services Index.