An improving U.S. economy could foster increased borrowing and financing by businesses, large and small, across the U.S. while benign mortgage rates could also provide a lift to the mortgage lending operations of regional banks.
“If KRX prices are able to reclaim the top of the post-2011 trendline, then not only is more upside opened up immediately in the sector, but it may be a vote of confidence for a continued hawkish tone out of the Fed. If the index is rejected here, then not only is further upside in financial shares going to be a challenge, but the interest rate pendulum may again swing back to the doves,” adds See It Market.
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SPDR S&P Regional Banking ETF