Strategas has an optimistic outlook, pointing to the steepening yield curve and higher highs in industry bellwethers, such as JPMorgan (NYSE: JPM) which hit a 15-year high on Monday. JPM makes up 1.7% of KBE’s portfolio.
Cornerstone Macro analyst Carter Worth also argues that the financial sector could help push the U.S. market to new highs as the charts are forming a bullish pattern. Specifically, Worth pointed to a wedge pattern in the S&P 500 financial sector. The Financial Select Sector SPDR (NYSEArca: XLF) has formed a wedge, or arrow-like, formation since the start of the year. Chart watchers are waiting for a breakout below or above the two predominant upper and lower bound lines. [Why You Might Want to Look at Bank ETFs Right Now]
SPDR S&P Bank ETF
For more information on bank sector, visit our financial category.
Max Chen contributed to this article.