Friday, November 6, 2015

Financials Leading the Market Higher (XLF; BAC; C)

As it must be at this stage of the bull market.
From Barron's Stocks to Watch:

Financials: It’s Not just Higher Rates
While financials stocks like Charles Schwab (SCHW), Genworth Financial (GNW), Morgan Stanley (MS), and Bank of America (BAC) are certainly benefiting from the potential earnings boost they could get from higher rates, Fundstrat’s Thomas Lee believes they’ll also get a boost from Washington’s focus on health care. He explains:
2016 is increasingly looking like a year of “re-allocation” of capital and leadership rotation—Washington shifts focus to Healthcare, benefiting Financials. One of the great frustrations has been the abrupt transitions in leadership in 2015, particularly in Healthcare. Healthcare headwinds could grow substantially if Washington’s scrutiny of practices expands, leading to perceived political risks.... 

This has become a bit of an  idée fixe with us. See September 10's "The One Market Sector That Really Matters Right Now (XLF)" through October 17's "Financial Stocks: And a Megabank Shall Lead Them (XLF)".

As long as this is heading up the bull market is intact. If it falters, an emotion somewhere along the caution, fear, terror continuum may be warranted:
XLF  The Financial Select Sector SPDR Fund daily Stock Chart