Friday, April 15, 2016

Dow Jones US Financials Index Underperformance Warning to Stay Away #Banks

News
Government bonds and bills will enter a contagion as the business cycle becomes deeply immersed in a liquidation phase in 2017. Banks stocks, particularly European ones, the dealers and holders of government securities, will be hit hard by the contagion. This sequence of events defies a growing acceptance of banks as a good investment in 2016 and early 2017. The leaves the public as the likely bagholders of the 2017/2018 crisis in government securities, the sectors that support them, and public sector.

While Dow Jones US Financials stocks, well off their 2007 highs, have consistently lagged the Dow and S&P 500, their underperformance is not considered a warning to stay away (chart)

Chart


Headline: Analyst: Most bullish on banks I've been in 20 years

A turbulent economic environment and sliding profits for big banks have not tempered one analyst's expectations.

In fact, Mike Mayo of brokerage CLSA said Thursday he is the most bullish on banks he has been in 20 years.


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.