We’re seeing rotation into the cyclicals this month, and no cyclical sector is larger or more important than the Financials.
It wasn’t so long ago that Financials were at the epicenter of a crisis, when Silicon Valley Bank and Signature Bank of New York both were taken into FDIC receivership. In the weeks before the banks failed, it looked as though the sector was set to lead the next stage of the stock price recovery. In the weeks that followed, though, Financials suddenly found themselves at multi-year lows compared to the S&P 500.
Now, the sector is finally challenging its pre-SVB highs again.