The midterm elections are almost sure to have an impact on financial markets.
JJ Kinahan, Chief Market Strategist at TD Ameritrade broke down which sectors are key to watch after the elections, as vigilant stock investors make their moves.
“There are two sectors you have to pay attention to right now,” Kinahan said.
“Number one: technology.” He noted much of the volatility the market has seen has been in tech stocks, which are certainly impacted by tariffs. “Tariffs may have a factor there,” he said. Indeed, semiconductor makers are grappling with heavier duties on equipment coming into the U.S. from China.
“The other one, of course, financials,” Kinahan said. He added, “If we are in a higher rate environment — the financials have not been able to get going in this anticipated higher rate environment.”
“Those are the two that I think are the primaries for us to continue higher.”
Banks and financials have underperformed the broader U.S. market this year, as the SPDr S&P Bank ETF KBE is down more than 8% year-to-date. Slightly higher net interest margins haven’t quite done the trick for those stocks, as some on Wall Street fear loan demand may put a damper on gains in banks.
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