The multi-month decline in 10-year YIELD—a flattening Yield Curve—has not negatively impacted the Financial Select Sector SPDR Fund (XLF) in quite the perverse way most analysts had expected.
In fact, XLF has cobbled together an impressive accumulation formation during the March-June deterioration of longer-term yield.
The 64,000-dollar questions is whether or not the relative strength of the Financial's (XLK) is anticipating reasons for longer-term YIELD to pivot to the upside, thereby supporting stronger earnings and net-interest margins in the banking sector?
My work hints that YIELD is nearing a significant multi-month corrective turn in the 2.10% area, ahead of the upside continuation of the July 2016 to Dec 2016 advance from 1.32% to 2.64%.
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