$Direxion Daily Regional Banks Bull 3X Shares ETF (DPST.US)$...
$Direxion Daily Regional Banks Bull 3X Shares ETF (DPST.US)$ new proposed banking legislation and requirements for reserves or wreaking havoc across the board this morning from large Banks to regional Banks. what's proposed is significantly less than the original basil requirements that were initially recommended last year and earlier this year. the sell-off that we're seeing now is exactly the same as what we observed in the past and this will yield outstanding buying opportunities.
the big picture is what you have to keep in mind and the big picture is
number one
we have not had a silicon valley Bank in a year and a half there have been several small banks that have failed but do you even hear about them? no do you pay attention to them? no
and that's because there's no contagion effect at this point
with interest rates that will be coming down over the next year and a half and right now it's 240 basis points is the anticipated cut which is just less than half of the 500 basis points increase that the Fed has done in the past 3 years.
the primary benefits to the regional Banks are
the commercial loans that everybody used to discuss the trillion dollars that are going to cause a collapse across the entire banking industry well they all don't get refinanced at one time and they will be much easier to refinance at lower rates than at higher rates additionally you are seeing occupancy in the best commercial properties at the highest levels we've seen in years at this point and the rents in cities like New York for example or the highest in the history and there's waiting lists actually to get in several of these key properties.
secondarily and where regional Banks make the bulk of their money is through the sale of houses number one and number two refinancing so refinancing houses that were sold at higher interest rates at lower interest rates is an enormous profit business and doing cash out refinances where people roll their debt their credit cards things of that nature into their house mortgage is another enormous cash grab for every lending institution.
so for these couple of reasons this leverage ETF will represent an outstanding buying opportunity in the very near future.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment