The financials sector is poised for growth, amid the Federal Reserve’s looming rate hike, according to one strategist. ‘The financials are one of our favorite sectors for the summer,’ said Nick Colas, chief market strategist at Convergex. ‘Financials benefit from a steepening yield curve, and it’s very clear that the longer end of the curve is going to move higher as the bond market gets ready for an eventual Fed liftoff.’ Yields on the benchmark 10-Year Treasury stand at 2.31 percent, compared to 2.12 percent towards the start of the year. Higher interest rates would boost margins for banks. Financial stocks in the S&P 500 have returned about 1.8 percent since the beginning of the month, and include names like Bank of America (BAC), JPMorgan Chase (JPM) and Citigroup (C) though those three banks traded lower on Wednesday, following the Federal Reserve’s move to keep rates unchanged, according to the statement from its June meeting.
More from Video
How quickly do we find support, is what we'll want to know now, as the correction is occurring while economic optimism builds.
Despite the president's promise of no stimulus until after Nov. 3, there are no signs yet that this is the sort of correlated selling that leads to a deep correction.
Salesforce, Amgen and Honeywell will give a lift to the DJIA going forward.
CAG has hung onto the bulk of its recent gains, and could rise to the $50 area, according to the charts and indicators.