Avid followers and traders of financial services stocks know the story all too well at this point. The Federal Reserve declined to raise interest rates following its September meeting. Financial services stocks and exchange-traded funds languished in the wake of that decision.
Regional Banks And Interest Rates
The SPDR KBW Regional Banking (ETF) (NYSE: KRE) is a prime example of that phenomenon. As seasoned financial services investors and traders well know, regional bank stocks and ETFs, such as KRE, have eagerly anticipating higher interest rates. Obviously, the Fed did not deliver last month, and over the past month, KRE, the largest regional bank ETF, has shed more than 2 percent.
Simply put, net interest margins at regional banks have been suppressed by the Fed's zero interest rate policy and reversing that policy is seen as an important catalyst in boosting profits for the banks ...
/www.benzinga.com/trading-ideas/long-ideas/15/10/5913469/leveraging-the-regional-bank-etf-trade alt=Leveraging The Regional Bank ETF Trade>Full story available on Benzinga.com
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