US Sectoral Trade (XLF)

US Sectoral Trade (XLF)

Our second trade for this evening is a BUY opportunity on the Financial Select Sector SPDR Fund  by our Trading Desk Analyst, Lester Davids.

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?

 


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