There are some obvious fundamental factors that bode well for U.S. debt ETFs, namely a slew of negative interest rate policies throughout the developed world, which make the low yields on U.S. bonds look all the more attractive.
“While KRE, the ETF that tracks regional banks, is still sitting near a $51 ‘support,’ Gordon said that if yields continue to fall, KRE could actually break below the $51 region and hit lows unseen since December of last year,” according to CNBC.
Aggressive traders can use the Direxion Daily Financial Bear 3X Shares (NYSEArca: FAZ), ProShares UltraPro Short Financials (NYSEArca: FINZ) and Direxion Daily Regional Banks 3x Bear Shares (NYSEArca: WDRW) to capitalize on any further downside from bank stocks and the broader financial sector.
Some analysts and traders argue that investors should be careful in making bullish bets on the financial services space, the S&P 500’s second-largest sector allocation, leading up to earnings season. In fact, analysts currently are not all that enthusiastic regarding bank stocks.
For more information on the financial sector, visit our financial category.