Sandy Lincoln from Wayne Hummer Asset Management was in the hot seat on Squawk Box.
He likes the financial sector. He notes that some banks can benefit increasing spreads as rates rise. He also notes that there are other financial stocks like insurers and asset managers are other ways to invest in the sector.
He is not concerned with the overall weight of the sector or its potential ability to drag down the SPX.
Believe it or not there is some history to support his contention. Rates (as measured by the ten year treasury) went up in early 2000 and the financials got hit. Rates went up again in mid 2003 and financials went up. Rates went up in early 2004 and financials were flat. To my way of thinking the Fed and the rise in oil makes it feel more like 2000 than anything else.
If this is anything like 2000 for the financials it may be worth noting that insurers and brokerages did out perform the banks. Thanks for the ideas, Sandy (not a sarcastic comment).
Wikinvest Wire
5 comments:
What was the yield curve doing at the time?
it was flat and on its way to inverting
After the "market of 2000-early 2003, I figured that the financials were just going up as a defensive, flight to quality move...maybe not.
george,
if that was right, and I'm not saying it wasn't, does the scandal factor alter that this time around? Or could the "realestate bubble" alter it?
Between the two: scandal factor ( FNM outcome ) and real estate ( oooooo I wish they had not been pushing interest only loans so much )...it MAY be dif this time.
g
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