We have yet to see much of an aftershock to market’s after yesterday’s tragic terror incident in France. The STOXX 600 has rebounded from early losses and is still set to finish the week up nearly 3%. Emerging mkts have extended their weekly advance to up over 4 percent, the most in 4 months.  But as we focus in, the Financial Sector (NYSEARCA:XLF) may be the most important to U.S. markets right now.
For today, Financial earnings are in focus.  After yesterday’s JPMorgan (NYSE:JPM) earnings beat, Citigroup (NYSE:C), PNC (NYSE:PNC), USB (NYSE:USB) and WFC (NYSE:WFC) all look to have beat Bottom line estimates. Will this help lift financial stocks even further?
The Financial Sector was a group we highlighted yesterday after outperforming nearly all other 9 S&P 500 sectors for the week while bouncing near key support relative to the S&P 500 Index (INDEXSP:.INX). Â That said, XLF looks to now face some headwinds with price resistance from last Summer coming in near 23.80. This could stall select financial stocks.
Financial Sector ETF Chart – $XLF
The Financial Sector (XLF) will be a key focus with financial earnings occurring this week. Despite the outperformance yesterday, we saw a fairly big reversal near key resistance. So this area from 23.80-24.00 will need to be overcome to have real faith in financial stocks.
OVERALL for today into next week, I expect upside to prove limited and stock market indices to begin at least a mild 3-5 day correction to alleviate some of the recent overbought conditions. I’ll be watching Wednesday’s lows of 2139. If broken, we may see a pullback to test 2100. Today’s upside resistance lies near 2168-70. Thanks for reading.
Twitter: Â @MarkNewtonCMT
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
