Lately there is a lot of scary stuff flying around the internet. You know, the purveyors of whatever will scare you the most, doing their thing. In this case, the scary headlines coming out of the world of Private Credit, with massive redemptions and/or the blocking thereof by firms like Blue Owl, Blackrock and Blackstone has helped drop the banking sector (in Wall St. lingo, the Piggies, or in my view, simply the Pigs).
That is a real threat… for Private Credit investors. It’s not to say that a market liquidity crisis will not erupt in the banking sector. But it is to say that traditional banks do not have heavy exposure to these Private Credit hacks. It is possible that the declines so far in the banks have accounted for the risk. Additionally, let’s keep in mind that the Federal Reserve, especially with its new Trump hand puppet to come, exists for the banks before anything else.
Here is a graph from MacroMicro (subscription recommended if you want conventional but highly detailed broad global market insights) showing which institutions have modest levels of exposure to Private Credit and a few with elevated exposure.
As to the technical situation, I pulled the charts of a couple of low exposure guys and found them to have declined to what would be a buying opportunity for someone who would be a fundamental Bank sector bull.
USB has dropped to test the top of its breakout pattern. It will probably drop to the next support level at 48.90 and the 200 day moving average. The current level (USB is down to 51.41 in pre-market) could be a place to start a position for a motivated buyer. 48.90 is for a more miserly buyer.
The trend is up, RSI is getting oversold, and I am putting it on my watch list.
Another is TFC, which is already testing its uptrending 200 day average and clear support. What I like is that this is clear support and a drop below the 200 day average (to whatever degree of comfort/discomfort one may have) can be used as a tolerance. I have this on watch as well.
NFTRH+ trade setup ideas are presented for consideration and further research only, not as recommendations. I may or may not personally take positions in all or even most NFTRH+ ideas, as it would depend on my portfolio composition at any given time. “Stop loss” and target levels are usually noted and should be respected.
