When Pigs Fly

When the Pigs fly tends to be when interest rate dynamics say they fly. Rising long-term interest rates, as long as they don’t materially hurt the economy, are beneficial to the banks’ bottom lines. Yesterday we looked at Amigo #2’s lift off and today that has continued amid headlines like these (from Bloomberg)…

Here is the daily chart of the Bank ETF I have held all along, since becoming constructive on rising long-term yields.


Here is the daily leadership chart of KBE/SPY, which we review each week in NFTRH’s Market Internals segment. From NFTRH 481, accompanying the chart…

“The next segment will cover the 3 Amigos, and one of them is the 10yr yield, which has been diverged by the KBE/SPY ratio lately. I don’t expect the disparity to last. If this Amigo is to ride to 2.9%, the KBE/SPY ratio will play some catch up.”


So far, so good.

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