Fintech vs. traditional Banks pic.twitter.com/1OC11QxcOH
— Strategas (@StrategasRP) September 29, 2021
Today’s Chart of the Day was shared by Strategas Research (@StrategasRP). It’s a chart of the ARK Fintech ETF, $ARKF, along with its performance relative to traditional Bank stocks below ($KBW). The top holdings in $ARKF include Square ($SQ), Shopify ($SHOP), Coinbase ($COIN), Zillow ($Z) and PayPal ($PYPL). Strategas points out that this group of sexy fintech stocks is breaking down below its 50-day and 200-day moving averages. At the same time, boring old traditional Bank stocks have been outperforming for the majority of this year, and look poised to continue doing so. This is a good example of the effect that rising rates are having on Growth stocks, like the ones in $ARKF. As rates move higher, Growth stocks look less attractive to Value-oriented stocks like traditional Banks. We keep hearing Financials “should” do well in a rising rate environment, and that’s true, but it’s important to be selective within the group.