Have the banks gone as far as they can go? Here's a group that has ridden the wave of talk about one or two rate hikes and just climbed relentlessly.
Call these stocks Stanley Fischer stocks -- the stocks that the vice chairman of the Fed gave a huge boost to when he didn't want to rule out two rate hikes.
It was a gratuitous and confusing statement, but it's kept a bid underneath the banks, every bank, whether it be the diverse regionals like BB&T (BBT) and First Horizon (FHN) and KeyCorp (KEY) or the majors like Citi (C) , Bank of America (BAC) , JP Morgan (JPM) and Wells Fargo (WFC) .
In fact, anything financial remains incredibly strong. There have only been a couple of weeks when the insurance stocks haven't advanced. They are just horses.
They have broadened the loved insurers of late. You are seeing a big move in AIG (AIG) after that recent good quarter. That had been a real laggard. Travelers (TRV) is back going for new highs after a pause. The insurance brokers, like AON (AON) and Marsh& McLennan (MMC) haven't ever cooled.
Same with the exchanges: Intercontinental (ICE) and Nasdaq (NDAQ) have so many buyers you have to believe that's just people believing there's even more consolidation coming. Intercontinental keeps taking out costs too.
But now the credit card companies, led by Discover (DFS) but followed by Mastercard (MA) and Visa (V) are looking incredible.
We own Visa for Action Alerts PLUS and it hasn't been able to take out this $80 level and it sliced through, knife through butter, as if there had never been any resistance.
Oh, and Berkshire Hathaway (BRK.A) , (BRK.B) , because of its interest rate sensitivity from its insurance portfolio, has joined the run.
But here's the rub. That employment number sure throws cold water on the Fischer scenario, and if that's the case, it is hard for me to believe that these stocks can all keep running.
So, here's what I am thinking. Watch Bank of America: it's the company where you can take numbers up the most if there are two hikes. It will tell us straight away.
Otherwise, the betting here is that the group has to stall out. Too much hot money. But we will know soon enough, and BAC will tell us what's going to happen.
