Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
Blog Home
Bob Carey
Chief Market Strategist
X •  LinkedIn

  Financial Stocks Off to Good Start But Near-Term Hurdles Persist
Posted Under: Sectors
Supporting Image for Blog Post


View from the Observation Deck

  1. The S&P 500 Financials Index has posted a total return of 13.4% year-to-date through 2/21. It is the second-best performing sector to technology, which is up 14.2%, as measured by the S&P 500 Information Technology Index
  2. Financials were the worst performing major sector in 2011. The S&P 500 Financials Index plunged 17.1% last year. To date, this year's rally has simply been recouping most of last year's sell-off.
  3. While we admit that valuations are attractive, we do suggest that investors consider purchasing shares of financials based on a multi-year time horizon.
  4. This would allow the banking institutions, in particular, to navigate all of the new regulations coming. Reportedly, only about 25% of the 400 new rules in the Dodd-Frank Wall Street Reform and Consumer Protection Act have been finalized.
  5. RealtyTrac expects the number of home foreclosure filings to rise from 1.9 million in 2011 to between 2.2 million and 2.5 million in 2012 now that a settlement ($25 billion) has been reached between the states and mortgage servicers.
  6. The silver lining for investors is twofold: Earnings have been improving since the 2008 global financial crisis (see chart) and the S&P 500 Financials Index is currently trading approximately 60% below its 10-year high on 2/20/07.
  7. Keep in mind that we are in an election year. The Republicans believe that there is too much regulation and would like to curb Dodd-Frank. We'll know more after November 6.
Posted on Tuesday, February 21, 2012 @ 3:51 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email

Watching Investor Activity
It's "RISK-ON" For Investors So Far In 2012
Municipal Bonds Offer More Value Than Treasuries
Institutional Capital is Driving the Stock Market Higher
Don't Let One Bad Year Keep You From Owning Foreign Equities
Strategic Insight Into Valuations
Semiconductor sales can be a good barometer for the Tech sector
Large-Caps are not expensive on an historical basis
Globalization is Not Dead
Biotechnology May Be the Best Remedy for an Ailing Health Care System
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.