Buy and Sell Signals, and Other Market Perspectives Message Board

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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 681.43

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Nov 10 4:00 PM EST

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To: GROUND ZERO™ who wrote (90659)	3/17/2017 11:14:32 PM
From: John Pitera	2 Recommendations Recommended By Hawkmoon Mevis Read Replies (3) of 218640

GZ, The yield curve has been flattening with These FED Fund increases and the financial and banks stocks as a general rule make more money in a steeper Yield curve environment.... The cost of funding ( at the short term rate) has been going up more than the long end... and this reduces banking profitability. When the Yield curve is flat or inverted banks and financial firms are looking at negative funding costs.... and are losing money.... a flat or a negative yield curve affects all companies that issue commercial paper and it impacts other profitability metrics. Hence the underperformance of the financials recently. (They also did have a very big run on the November 8th lift off and are less attractive metrics such as price to book, price to sales ratio etc. John

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