Issues
The election is changing things.
The difference is the expectation of stronger economic growth. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. Financial, energy, and consumer discretionary sectors are leading the market. And this changing dynamic is likely just in the very early stages.
In this issue, I will focus on an opportunity in the financial sector.
Financial stocks, of which banks make up a big part, generally make profits from the spread between the cost of funds, mostly short-term rates, and what they charge for loans. Higher spreads mean more profits.
The Fed has begun a rate cutting cycle that will likely last for two years. Banks also need a good economy with strong loan demand. The better economic prognosis after the election is bullish. Plus, there is likely to be a much friendlier regulatory environment for banks and financial companies in the new administration.
In this issue, I highlight one of the highest-growth major financial companies that will surely benefit from the improving dynamic going forward. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble, and a price spike should be ahead.
The difference is the expectation of stronger economic growth. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. Financial, energy, and consumer discretionary sectors are leading the market. And this changing dynamic is likely just in the very early stages.
In this issue, I will focus on an opportunity in the financial sector.
Financial stocks, of which banks make up a big part, generally make profits from the spread between the cost of funds, mostly short-term rates, and what they charge for loans. Higher spreads mean more profits.
The Fed has begun a rate cutting cycle that will likely last for two years. Banks also need a good economy with strong loan demand. The better economic prognosis after the election is bullish. Plus, there is likely to be a much friendlier regulatory environment for banks and financial companies in the new administration.
In this issue, I highlight one of the highest-growth major financial companies that will surely benefit from the improving dynamic going forward. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble, and a price spike should be ahead.
Updates
The market has been just great! The S&P 500 was up 5.7% in November and now has a 26.47% year-to-date return. This adds to the 26% market return last year.
Stocks were riding high, and the election provided a further boost as investors expect a higher level of economic growth going forward. The cyclical stocks have led the recent charge. The best-performing market sectors since the election are finance, consumer discretionary, and energy.
Stocks were riding high, and the election provided a further boost as investors expect a higher level of economic growth going forward. The cyclical stocks have led the recent charge. The best-performing market sectors since the election are finance, consumer discretionary, and energy.