Stocks around the globe were treated to a shock last week as rising interest rates in the United States sparked a selloff that quickly spread internationally. Fortunately, positive economics news in the U.S. has managed to put indexes back on the right track as we have started this week.
All three major U.S. indexes rose over 2% on October 16. This came after the release of a report that revealed job openings hit a record 7.14 million in August 2018. The total number of hires also surged to 5.78 million. Average hourly earnings also increased 2.9% in August and 2.8% in the month of September.
Investors should consider the iShares US Financials ETF (NYSE:IYF) in light of this positive report. The ETF rose 1.69% on October 16 and shares are up 4% year over year. Some of its top holdings include Berkshire Hathaway Inc. (NYSE:BRK.A), JPMorgan Chase & Co. (NYSE:JPM), and Bank of America (NYSE: BAC).
U.S. financial institutions have reported record earnings on the back of the U.S. Tax Cuts and Jobs Act. Commercial banks reported record profits in the second quarter of 2018.
There is good reason to expect this to continue in the final two quarters of 2018. Improved economic activity is also projected to maintain a solid growth rate in the U.S. economy in 2019 before a slowdown beginning next decade.
This may be one of the last opportunities for investors to cash in on U.S. financials in the near term as the bull market reaches maturity.
