As equity markets begin to recover, many are flirting with ten month highs, and related exchange traded funds(ETFs) are enjoying the gains.
As the major equity markets are starting to build up to 10-month highs, some have even surpassed them, and certain ETFs are reflecting the success. Billy Fisher for Investopedia noted some of the top ETFs, and we’ve thrown in a few of the ones we’ve noticed, as well.
Sizable gains, a payback to the government and better-than-anticipated earnings are signaling a bottom may have been touched upon within the financial sector. There’s still a need for caution, though: financial ETFs have gained more than 100% off the March 9 market low, but the Federal Deposit Insurance Corporation (FDIC) reported that banks lost $3.7 billion in the second quarter in bad loans made to homebuilders, commercial real estate developers and small- and mid-size businesses,
- PowerShares FTSE RAFI Financials (PRFF): up 60% in the last three months
It’s not just big banks that have been a part of the rally. Regional banks have participated, too. IAT is up 16% for the past four weeks, but tread lightly– Rochadale Securities analyst Richard Bove said that an additional 150-200 banks could go under during the current banking crisis.
- iShares Dow Jones U.S. Regional Banks (IAT): up 12.9% in the last three months
VNQ had fallen 40% last year, but has recovered around 20%. Companies in this space will soon be facing debt payments resetting at higher rates, but it appears that most of the damage has already been taken into account by the market.
- Vanguard REIT Index (VNQ): up 22.5% in the last three months
The insurance sector is showing some signs of recovery. Layoffs within the sector are slowing down. In August, 8,000 layoffs are predicted – the smallest loss within the sector since July 2008, reports Insurance Working News.
- SPDR KBW Insurance ETF (KIE): up 27% in the last three months
Turkey’s market index has been driven up by the help of the banking sector, which make up around 40% of the market. Bank earnings have been bolstered by a series of rate cuts that has reduced interest on customers’ deposits as lending rates remain high. The Turkish economy shrank 13.8% in the first quarter year-over-year, as tax revenue receded because of a 23% fall in industrial production and rising unemployment.
- iShares MSCI Turkey (TUR): up 40% in the last three months
For more stories about banks, REITs and Turkey, visit the financial, Turkey and REITs categories.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.