Cameron Hurst iShares Dow Jones Regional Bank E.T.F. IAT-N COMMENT Feb 06, 2019

US Banking Sector People are watching interest rate futures for a signal of US Fed actions. It is so early in the year and only 5 weeks after the Fed loosened their language. He still sees the Fed keeping liquidity constrained. The US bank sector credit position is pristine right now. The problem is that the banks are not preforming well, relatively speaking. He wonders where the future growth will come from. He would look elsewhere.

Cameron Hurst

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$45.320

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TOP PICK

Has way outperformed the market may lead you to the fact that if a professional investor invests on a sector weighting basis this is one of the less risky areas that they put money into. Growth in the good old fashioned banking business and asset management is good and they are not having the pressure and problems of credit default swaps etc.

SELL ON STRENGTH

The only thing that concerns him is lawsuits with regional banks. He would not hold onto it forever.

COMMENT

An ETF that follows US regional banks? This would be one ETF that you could look at. For some of his clients, he wouldn’t mind taking a look at this. The problem he has had with the US banking system, is not so much concern about their viability, but it is the lawsuits which have been horrendous for the large banks, not the regional ones.

COMMENT

US Bank ETF or would an individual bank be better? You are better off to buy a diversified portfolio through an ETF. It gets rid of the risk of a single stock blowing up on you. He would suggest iShares US Financials (IYF-N) which are financials, not just banks. Another is iShares Dow Jones Regional Bank ETF (IAT-N). Or you could look at BMO Equal Weight US Banks Hedged to Cad (ZUB-T). He likes ZUB-T and is the way he would play this.

SELL

He'd sell it. In fact, he expects it to fall back to $40. It heeps having trouble breaking through $50. The chart needs to prove itself to him.

WATCH

Reverse head and shoulders. The low at the end of 2018 indicated something had really changed with the banks. Indicators are oversold. Would expect it to base, and then move higher. If it hits $37, it means something's changed and sell it.

HOLD

The US banks are really cheap, but washed-out. He prefers the US regional banks, because they're not involved in the capital markets in a big way and are rather into housing. However, loan demand is a little weak (though not collapsing), because there aren't a lot of houses. This will get fixed in time. If you own this, hold it and be patient.

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Cameron Hurst iShares Dow Jones Regional Bank E.T.F. IAT-N COMMENT Feb 06, 2019

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