– The flatting yield curve has been pressuring financials in recent months.
– On a relative strength basis the sector has still preserved a fair amount of 2016 election-driven outperformance versus the S&P 500 Index.
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Source:
LPL Research, Bloomberg 06/28/18
Important Disclosures:
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The S&P Financials Index is a market capitalization weighted index that tracks the performance of financial companies.
Yield curve represents the spread between yields on the 10-Year and 2-Year U.S. Treasuries.
Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
A spread is the differential between a yield of a bond and the yield of a comparable maturity Treasury security. As Treasury securities have very low risk, this spread can be seen as an investor gauge of sentiment, with a higher spread indicating greater concern.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.
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