The banking sector is breaking down in relation to the S&P 500
 SV Bank meltdown! Shows how closely I follow the news of the day. Obviously consistent with favored 2023 macro themes.
What do we have for a macro backdrop? Well, there are different interpretations. But mine is Goldilocks (comfortably and slightly disinflationary), which will transition at some point to uncomfortably disinflationary.
So it makes sense that the banking sector, which normally favors inflationary spirits and rising yields, are not favoring any such thing at the moment. Just today the ratio of KBE to SPY is ticking a new low after a long and volatile consolidation since inflation initially benefited the pigs into spring of 2021. It’s actually a distant cousin of the Copper/Gold ratio, which is resisting breaking down to this point, and other cyclical indicators.
A breakdown would strengthen the counter-cyclical view. That is the view that would benefit the counter-cyclical sector, the gold stock sector. Eh?
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