Is there a warning signal flashing in the financials? The S&P was up in thin mid-day trading Wednesday, but once again financials slipped. So the Fast traders turned their attention to the XLF exchange traded fund , which has been making a series of lower highs, to determine what it means for the sector and the economy.
“In terms of the economy, it’s not a great sign,” Stephen Weiss said. “Financials are supposed to be the leaders, not the laggards.”
However, trader Brian Kelly sees the possibilities in the financials and has jumped right in. He likes SPDR KBW Regional Banking and Wells Fargo because of the steep yield curve, which he thinks might get even steeper. He also sees the willingness to loan and demand for loans increasing.
“As long as they meet, the banks should make an awful lot of money,” he said.
But Pete Najarian cautions not to get in too deep to financials just yet. However, he said people are looking for a little bounce out of Citigroup Wednesday and perhaps into the weekend because of the weekly options that expire Friday.
Stephen Weiss sees opportunity in the sector too, but only in regionals.