Regional Update:
We love to compare how not only certain sectors tend to hold up against competitors but also subsectors within specific groups. Today we look at the regional banks against their money center peers. In our last financial note, we noticed the KRE outperformance, and it continues as of the present. But it has been doing so for some time now. On a YTD basis, its decline of 5% is half that of the XLF, and over the last one-year period the KRE is higher by 1% while the XLF is lower by 9%. Over the last 3 months, the KRE has jumped 15% and the XLF by 5%. I think we get the picture. And remember trends in motion tend to stay that way more likely than they are to reverse. PRICE is all we care about and in that regard, KRE is acting very nicely higher in 17 of 22 sessions since the completion of a bullish morning star formation on 7/15 that rose 3.3%, its best advance of the 17. It is now nestled up against its 200-day SMA and the XLF is improving as well. It is a welcome addition we are seeing in the broader overall participation of the market rally.