JPMorgan Holds the 50-day as Curve Steepens

Technology stocks have undeniably led the market for several months. However the banks are showing signs of strength.

JPMorgan Chase has been quietly making higher lows along its 50-day and 100-day simple moving averages ( SMAs ). That suggests its intermediate-term trend is at least neutral, and possibly nearing a bullish state.

In and of itself, the chart is still inconclusive. But another chart, 30-year Treasury Yields , could add a fundamental reason to consider the banks. As we highlighted on August 10, bond prices were slamming into resistance as the economy showed signs of rebounding from coronavirus. (That pushes yields higher.) Jerome Powell’s new commitment to hotter inflation might also keep upward pressure on long-term rates.

The result could be a push/pull from the Fed. Inflation pushes long rates higher as the FOMC's target range pulls short rates lower.

That’s potentially a positive environment for banks like JPM that profit from a steeper yield curve. It could also get a cyclical boost if the economy continues to recover. (The second item on Powell’s agenda was a recovery in the job market.)


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