Last month, the Federal Reserve said 17 of 18 banks passed its latest round of “stress tests.”
Financial stocks were solid performers in 2012 and equity bulls are looking for more strength from the cyclical sector as the S&P 500 and Dow Jones Industrial Average test all-time highs. XLF gained about 28% last year to nearly double the return of the S&P 500.
Yet if the financial ETF starts to lag the market, it could be a warning sign for the bulls. “As go the piggies, so goes the poke,” Minyanville founder and CEO Todd Harrison is fond of saying on the bank stocks.
Financial Select Sector SPDR