Failing US Bank Sector Threatening To Take Entire Stock Market Down With It, Say Investment Specialists: Report

Pain in the US banking sector could be foreshadowing a potential disaster in the stock market, according to analysts at several financial institutions.

According to a report from Bloomberg, Jim Roppel, hedge fund manager at Roppel Capital Management says that stocks in the US financial sector are flashing “ominous signs.”

The S&P 500’s financials index, which tracks finance stocks in the S&P 500 which are in the GICS (Global Industry Classification Standard), is suggesting a big move lower for the broader sector, according to Roppel.

He says the index has been trading above a 2007 support level, but if it breaks, disaster could ensue. The investor says he’s mostly in cash and defensive assets like gold and gold mining stocks.

“You can’t have a bull market if bank stocks are falling… It’s like if an Olympic athlete had cinder blocks around their legs.”

Source: Bloomberg

Scott Colyer, CEO of Advisors Asset Management, reportedly said he won’t be a buyer in the stock market until a significant correction, due to the weakness in financials.

“We have to see have financials leading the way for the stock market to be in a sustainable uptrend — but that’s not what’s happening… Don’t pick up nickels and dimes in front of a steam roller.”

The analysts’ warnings come following the collapse of several large banks, and the more recent beatings in regional bank stocks, such as PacWest Bancorp, Western Alliance Bancorporation, Metropolitan Bank Holding Corp and others.

Former Goldman Sachs executive and Real Vision founder Raoul Pal has said that Federal Reserve will likely be forced to pause on its interest rate hikes, given the situation in the banking sector.

“The banks are suggesting that the Fed would be absolutely bananas to raise rates again… and add to that the risk of more noise around the debt ceiling and possible liquidity removal. They are walking a very tight rope…

Feels like a bonds + crypto moment brewing…”

Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox

Check Price Action

Follow us on Twitter, Facebook and Telegram

Surf The Daily Hodl Mix

Check Latest News Headlines

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/SimoneN/bobyramone

Source: https://dailyhodl.com/2023/05/08/failing-us-bank-sector-threatening-to-take-entire-stock-market-down-with-it-say-investment-specialists-report/