Our second trade for this evening is a BUY opportunity on the Financial Select Sector SPDR Fund by our Trading Desk Analyst, Lester Davids.
XLF Quotes by TradingView
Lesters’ thesis on the trade, includes:
- US economy (despite what you hear on the news) remains robust;
- Unemployment low, adding jobs at a strong rate;
- ETF has lagged market over long term (since Financial crisis) and over short term 12 months;
- ETF trades at 14xPE vs S&P500 at 19xPE. This represents a 26% discount;
- US Banks better capitalized vs period during 2007/2008;
- Rising rates a catalyst for a re-rating?
XLF Chart by TradingView