This past week, the financials sector $XLF ( ▼ 0.32% ) closed at new all-time highs. Why is this important? If you were to take a poll on the most important sectors in the stock market, your highest two answers would be Technology and Financials. Technology because this sector has the current largest companies in the world, and Financials because it essentially serves as the “engine” of the economy. Banks, credit unions, and other financial institutions provide critical services such as loans, insurance, and investment management, all of which are directly tied to economic growth and stability. If the economy were as bad as the economists thought, financials would not be making new highs.

The Banks

Bank stocks are looking extremely good, and these are my favorite setups among them.

The Middle-Men

Broker Dealers and Securities Exchanges are the middle-men of financial markets. Think of broker dealers like real estate agents, and the exchanges like platforms such as Zillow and MLS. Both of them heavily rely on each other. With $IAI ( ▼ 0.34% ) closing at new all-time highs, this signals market structure is strong, and market participation is there.

Conclusion

The financials sector making new all-time highs is just another box to check in the bull market checklist. More offensive sectors continue to make new highs, which is exactly what we want to see. With the financials sector being so important to the economy, many would argue it’s the one sector they’d most want to see hitting new highs. The bull market continues to rage on. What do you think about all of this? Feel free to reach out and let me know your thoughts. As always, thanks for reading and blessings to all!

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