EUR 60.04 For Business Accounts Only

Insights - Bullish Financials: AB, BAC, BEN, BLK, EV, GS, IVZ, JPM, MS

​The Financial Sector is a key Sector to watch in the current market recovery, as there has been significant internal rotation occurring for the last 9 months, from defensive REITs and Insurers, to in and out of banks, depending on the direction of oil prices (and potential exposure to bad debt). There has also been the uncertainty of interest rates and their broad implications for the Sector. Regardless, we can definitively say that once crude oil bottomed so did interest rates. And, part of the reason crude oil finally bottomed is the fall in the dollar, as the Fed indicated they are in no hurry to raise interest rates. This is intermarket technical analysis at its finest.

Higher interest rates would support a dollar – that won’t happen for a while as the Fed is willing to let the “old economy” inflate alongside the “services economy,” apparently in an attempt to form an economic cushion should the economy slow. This is the perfect environment for the market engines in the Financial Sector to gain traction and finally start performing. It is also ideal for internationally exposed companies to perform better given the falling dollar.

The following charts display the evidence – significant price and RS inflections, bottoms, and rallies out of oversold conditions in the Asset Managers, Custody Banks, and Investment Banks across all market cap spectrums. The aforementioned companies highlighted support our bullish Group calls.