Bullish on Financials: Investors Banking on Earnings and Dividend Growth

In early October, I suggested that Financials might soon join the party, as they were still mired then in a trading range. After acknowledging the well-known risks, I pointed out several positives: Improving Charts Good Valuations Risk-taking in favor again Improving Breadth While it has been Energy getting all of the attention lately, Financials have been staging a stealth run at leadership among the remaining sectors. With the clarity on dividend payments fueling a flood of announcements this week, I thought it might make sense to take another look at the sector. So far in 2011, only 4 sectors are up. Energy, of course, is dominating, with cyclical Industrials and Consumer Discretionary showing green as well. Financials, at +1.95%, are in a solid 3rd place. After the past few years, this is quite a change for the sector, which led on the way down and lagged on the way up.... Read more