Bank ETF Pulls Back Before Earnings
Banks ended 2019 on a strong note as gloom toward the economy lifted and investors started to appreciate their low valuations. Now a key exchange-traded fund has pulled back to a potentially important level: The 
SPDR Regional Bank ETF.
KRE is holding the same $57 area where it peaked in February and November. The 50-day simple moving average (SMA) has also risen up to the same area, producing a confluence zone.
Stochastics are also showing a potentially oversold condition.
Earnings season next week may provide some catalysts as well. The reports begin with big names like
JPMorgan Chase, 
Citigroup and 
Wells Fargo on Tuesday, with smaller regional lenders following soon after.
The recent Iranian turmoil has hurt banks, however the broader backdrop could favor them: Economic growth continues to improve and the Fed is keeping short-term rates down. That could steepen the yield curve, one of the key ways that financials make money.
Value investors might also like the multiples on banks because KRE's price/earnings ratio is under 13x, according to ETFdb. Compare that to 23x on the QQQ (Nasdaq-100) or 20x for SPY (S&P 500).
SPDR Regional Bank ETF.KRE is holding the same $57 area where it peaked in February and November. The 50-day simple moving average (SMA) has also risen up to the same area, producing a confluence zone.
Stochastics are also showing a potentially oversold condition.
Earnings season next week may provide some catalysts as well. The reports begin with big names like
JPMorgan Chase, Citigroup and Wells Fargo on Tuesday, with smaller regional lenders following soon after.The recent Iranian turmoil has hurt banks, however the broader backdrop could favor them: Economic growth continues to improve and the Fed is keeping short-term rates down. That could steepen the yield curve, one of the key ways that financials make money.
Value investors might also like the multiples on banks because KRE's price/earnings ratio is under 13x, according to ETFdb. Compare that to 23x on the QQQ (Nasdaq-100) or 20x for SPY (S&P 500).
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