Banking Redux

The S&P 500 index (SPX) rose 1.36% today while bonds, oil and gold prices all declined slightly. Financial stocks led the way as the sector closed a whopping 3.73% higher.

Read in Browser   Chart Advisor | Focus on the Price By Gordon Scott, CMT Wednesday, June 03, 2020 1. The financial sector shows strength as markets lift 2. Investment banking returns 3. Oil price influences forex markets Market Moves The S&P 500 index (SPX) rose 1.36% today while bonds, oil and gold prices all declined slightly. Financial stocks led the way as the sector closed a whopping 3.73% higher. The chart below compares State Street's financial sector ETF (XLF) with the Utilities sector ETF (XLU), the S&P 500 index ETF (SPY), and Invesco's Nasdaq 100 index ETF (QQQ). Over the past three weeks banking stocks have surged and outpaced other sectors as financial companies have shown signs that they will recover from the economic effects of the pandemic.   The reemergence of the financial sector is important among professional investors who don't see a bull market as sustainable unless this sector participates. A more typical rebound from recessionary times follows a sector-rotation script where the financial stocks tend to rebound first, followed by technology stocks. That script is flipped this time around because of the unique nature of the pandemic-driven recession.     Investment Banking Returns Financial sector stocks showed common patterns of breaking outabove recent resistance and confirming upward trending price patterns. In the chart below, Goldman Sachs (GS), J.P. Morgan Chase (JPM), Citigroup (C), and Bank of America (BAC) all show similar upward trends and a breakout from something like a double-bottom price pattern (except for BAC which has yet to break out). Experienced chart watchers recognize that such patterns often represent opportunities for continued upward movement.     Read more: The Reopening Rally and What Could Hobble It Charts Suggest Innovative Tech Stocks Are Headed Higher Lululemon Stock Overbought and Overloved Ahead of Earnings SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. LEARN MORE  > Oil Price Influences Forex Markets Since the storage fiasco last month, Crude Oil futures (USOIL) have recovered nicely and continue to show a strong upward trend. During the past three weeks, currency patterns have emerged that identify oil-related influences. It is useful to take note of the similar patterns (see chart below) that have occurred to anticipate which currencies are likely to continue with oil-related movements in the near future. As COVID-19 restrictions ease and the economy returns to normal, demand for travel, services and products will bring oil prices back to familiar levels, prompting moves in these and other currencies as well. The Bottom Line Stock market indexes moved still higher again today with the financial sector surging into an upward trend. Banking stocks' reemergence signals the possibility of continuing upward trends. Oil-related currency moves also signal the possibility that rebounding markets may continue through the weeks and months ahead. How can we improve the Chart Advisor? Tell us at chartadvisor@investopedia.com CONNECT WITH INVESTOPEDIA Email sent to:  mondemand.forex@blogger.com If you wish to update your newsletter preferences or unsubscribe, please click here   114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC. All Rights Reserved | Privacy Policy