Financial Stocks Will Under-Perform In 2014

Financials have had a great run this year. Financial Stocks have out-performed the broader market, rising as much as 30+ percent, and they haven’t looked back since. Anyone waiting for a correction has been brutally annihilated. The market hasn’t had a huge sell-off this year. There have been minor snags along the way, but all-in-all, it’s the BULLS that have been pushing this market to new all-time-highs.

One of the main reasons why the market has rallied so much this year is the Financial Sector. The same sector responsible for the 2008-2009 recession. And even though on the surface it might appear that Wall Street has fallen in love with Financials once again, the reality is, this love is nothing more than a cheap one night stand. It’s temporary. Soon Wall Street will turn against the Financials, especially when The FED announces it’s QE Taper Schedule. The second that schedule hits the newswires, expect Financials to take a huge hit, and as a result, take the whole market down with it. It wont be an overnight sell-off, but a slow and painful one, that might continue into 2015.

I’ve said it before, and I’ll say it again: The current levels that the markets are trading at, are simply unsustainable. Once the free money from The FED’s printing press stops flooding the markets, we’ll get a more realistic look at the overall Economy.

I predict a bad 2014 for Financial Stocks.

The following two tabs change content below.

Wall Street Fool

Wall Street Fool provides unbiased real-time market analysis and commentary for Stocks, Bonds, Futures, Forex, Fixed Income, and Derivatives markets.
Share

About Wall Street Fool

Wall Street Fool provides unbiased real-time market analysis and commentary for Stocks, Bonds, Futures, Forex, Fixed Income, and Derivatives markets.
This entry was posted in Observations, Stocks and tagged , , , , , , , , . Bookmark the permalink.