Piling Into Financials

A couple weeks ago I shared our current narrative on the financial sector. Here's a snippet:

"...if I’m right on the overall macro setup, and there’s no protracted global trade war, the second half of the year will see optimism come back and the yield curve steepen (per the no rate hike commitment, and an exodus at the longer-end of the curve). A scenario that would have money screaming back into a sector that trades at a huge discount to the broader market." 

 Here's from Bloomberg this morning:

"Traders put $960 million into the $24 billion Financial Select Sector SPDR Fund, ticker XLF, in the week ended Friday -- the most since December 2017."

 

 

Clearly, for the moment, traders are anticipating that scenario...