So, if you haven't heard about "Brexit" yet then you have most likely been sick, or under a rock somewhere. Financial media and the internet have been going crazy posting potential outcomes and scenarios for the worlds markets. The votes will have been counted and the future of the UK looks to be out of the European Union.
We could take the time to offer our opinion about what may or may not happen, but it would be just that, an opinion that has no statistical validity what so ever. See the truth is no body knows what the markets may do in response to the UK leaving.
When I write articles, I try and think of something that can be of actual help to people. Sometimes we focus on beginners and other times we focus on current events that are actionable, and can potentially help you. So today I will turn your attention from whatever may or may not happen with the UK, and focus on the markets activities now.
It hasn't been reported widely, but the financial sector has been attracting more and more of traders' attention this week. Ever since the low set last Thursday the financial select sector ETF (NYSE: XLF) has been on one of those sneaky rallies that people have to chase once they see it. Thursday was a good example of that as it was already up 5 days and on the 6th day had its best performance in over a month.This indicates that may have been late to the party and the XLF may be getting full of buyers in the short term.
Now, that doesn't mean that missed an opportunity. Its just that in the short term it may be a little exhausted. Overall the news for the banking stocks just gets better and better.
Thursday the jobless claims numbers came out and were way better than expected, further highlighting a growing (although slowly) economy. Add to that, we can forget that the Fed is still looking to raise rates. This is great news for lending banks.
The point is that the "Brexit" thing has just been a distraction, and this drop, along with increased volatility in the short term will ease, and when the dust settles everyone will return to talking about the econ numbers and how they are improving. Where does everyone run to when the economy shows positive signs... The banks!