ETF Power Rankings – Here’s Where the Post-Election Money Is Flowing I don’t usually invest in exchange-traded funds, but I track them closely as another tool in helping me identify areas of strength in the market and where Big Money is flowing. The downside to ETFs is that you have to own all of the stocks in it, including the laggards. I prefer to own the individual stocks that rank the highest in terms of fundamentals, technicals, and Big Money inflows. ETFs can be excellent sources for finding those stocks, and they are great proxies of what’s going on in the market and certain sectors. And right now, I see something highly unusual. Seven of the Top 10 ETFs in my system are in the same sector, and it’s probably not the one you would immediately think of… Financials. A lot of stocks surged Wednesday after it became clear that Donald Trump won the election, but financials led the way. The Financial Select Sector SPDR Fund (XLF), which I use in my system as the proxy for the sector, shot up 6% on Wednesday. And yes, Big Money was a big part of that. In fact, my Quantum Edge system picked up a record number of Big Money buy signals in XLF on Wednesday since mid-2020, which is where my current data starts tracking the ETF. There were 136 buy signals (those important green bars) to just 4 sell signals (red bars). 
Source: MAPsignals.com There’s no question which direction the money is flowing, and there’s no question this is part of the Trump Trade. The market anticipates deregulation in a Trump presidency, opening the door to more mergers and acquisitions, which benefits banks. There’s also talk of lower capital requirements and perhaps the ability to raise consumer fees. Following those Big Money flows is critical, so let’s look at the Top 10 ETFs in my system’s latest Power Rankings. I’ll include their Quantum Score, post-election performance, and top five holdings by weighting. All have Quantum Scores in the 70s, which puts them in my preferred buy zone between 70 and 85. There are seven financial ETFs in the Top 10, including big banks and regional banks, as well as a couple of more tech-heavy funds and one that focuses on rotation. Here’s the Top 10, and then we’ll talk about some of the winners… 1. Invesco KBW Bank ETF (KBWB) - Quantum Score: 76.7
- Since election: +8.8%
- Top 5 holdings: Morgan Stanley (MS), Wells Fargo (WFC), Bank of America (BAC), Goldman Sachs (GS), JPMorgan Chase (JPM)
- Tracks: KBW Nasdaq Bank Index
2. First Trust Nasdaq Bank ETF (FTXO) - Quantum Score: 76.0
- Since election: 9.5%
- Top 5 holdings: Wells Fargo (WFC), Bank of America (BAC), U.S. Bancorp (USB), Citigroup (C), JPMorgan Chase (JPM)
- Tracks: Nasdaq US Smart Banks Index
3. iShares U.S. Regional Banks ETF (IAT) - Quantum Score: 75.6
- Since election: 9.2%
- Top 5 holdings: PNC Financial Services (PNC), U.S. Bancorp (USB), Truist Financial (TFC), M&T Bank (MTB), Fifth Third Bancorp (FITB)
- Tracks: Dow Jones U.S. Select Regional Banks Index
4. Innovator IBD 50 ETF (FFTY) - Quantum Score: 74.6
- Since election: 8.3%
- Top 5 holdings: Palantir (PLTR), Hims & Hers Health (HIMS), Celestica (CLS), TG Therapeutics (TGTX), Procept BioRobotics (PRCT)
- Tracks: IBD 50 Index
5. SPDR S&P Regional Banking ETF (KRE) - Quantum Score: 74.1
- Since election: 10.5%
- Top 5 holdings: M&T Bank (MTB), Huntington Bancshares (HBAN), Regions Financial (RF), Citizens Financial (CFG), Truist Financial (TFC)
- Tracks: S&P Regional Banks Select Industry Index
6. Financial Select Sector SPDR Fund ETF (XLF) - Quantum Score: 72.9
- Since election: 5.8%
- Top 5 holdings: Berkshire Hathaway B Shares (BRK.B), JPMorgan Chase (JPM), Visa (V), MasterCard (MA), Bank of America (BAC)
- Tracks: Financial Select Sector Index
7. Invesco KBW Regional Banking (KBWR) - Quantum Score: 72.9
- Since election: 10.8%
- Top 5 holdings: Webster Financial (WBS), Commerce Bancshares (CBSH), Pinnacle Financial Partners (PNFP), SouthState Corp. (SSB), Popular, Inc. (BPOP)
- Tracks: KBW Nasdaq Regional Banking Index
8. Stocksnips AI-Powered Sentiment US All Cap ETF (NEWZ) - Quantum Score: 72.8
- Since election: 6.6%
- Top 5 holdings: Trane Technologies (TT), Arista Networks (ANET), Motorola Solutions (MSI), Paylocity Holding (PCTY), KKR & Co. (KKR)
- Tracks: Actively managed/stocks trending in Stocksnips News Media Sentiment
9. Burney U.S. Factor Rotation (BRNY) - Quantum Score: 72.7
- Since election: 6.6%
- Top 5 holdings: Nvidia (NVDA), Fortinet (FTNT), Meta Platforms (META), Texas Roadhouse (TXRH), Cencora (COR)
- Tracks: Actively managed/market patterns Burney believes to be in favor
10. SPDR S&P Bank ETF (KBE) - Quantum Score: 72.5
- Since election: 9.4%
- Top 5 holdings: Apollo Global Management (APO), East West Bancorp (EWBC), Wells Fargo (WFC), Jackson Financial (JXN), Glacier Bancorp (GBC)
- Tracks: S&P Banks Select Industry Index
And The Winners Are… With bank ETFs dominating the Power Rankings, it’s not surprising that three big banks appear most often as holdings these ETFs: Bank of America (BAC), JPMorgan Chase (JPM), and Wells Fargo (WFC). All three post Technical Scores of 88.2, which is very strong, so the difference in the overall Quantum Score comes down to fundamentals. JPM rates the lowest fundamentally, and its 74.1 Quantum Score lags both BAC and WFC at 77.6. 
Source: Quantum Edge Pro The highest-rated stock in the list above is Apollo Global Management (APO), an investment management firm, which boasts a hefty 87.9 Quantum Score. That’s among the highest scores in my system, and you’ll notice that it’s actually a little bit above the optimum buy zone. 
Source: Quantum Edge Pro I love the outstanding Fundamental Score at 83.4. And while the 91.2 Technical Score indicates tons of strength, it also indicates the stock may be overheated. Technicals above 90 often precede a pullback. That wouldn’t be surprising after APO’s 17% jump in the two days after the election and its 55% surge the last three months. I like to be selective with financials because they often carry high debt, which lowers their scores in my quant system. That said, there are highly rated financial stocks with acceptable debt levels. One I recommend in Quantum Edge Pro has virtually no debt (less than 1% of equity), a Quantum Score of 81, and is now up more than 80% for us. I also like to ride the waves of Big Money, and you should, too. This the money that moves stocks, and financials are clearly among the leaders in these first days of Trump 2.0 trades. Talk soon,  Jason Bodner
Editor, Jason Bodner's Power Trends P.S. My quant system crunches 120 data points per stock every day, and the algorithms apply 29 proprietary indicators to those 120 data points. That’s millions of data points every single day analyzed to pinpoint stocks ripe for massive institutional buying. That’s how my system has beaten the market 7-to-1 since 1990. The Quantum Score is the executive summary of all that analysis, and it is the best starting point on any stock you’re considering – or for checking stocks you already own. Now you can access the Quantum Score – as well as the Fundamental and Technical scores – for the roughly 6,000 stocks my system analyzes every trading day as a member of Quantum Edge Pro. Click here to learn more about those important green buy signals, how to join Quantum Edge Pro, and how to leverage the power of the Quantum Score. | 
0 Response to "ETF Power Rankings – Here’s Where the Post-Election Money Is Flowing"
Post a Comment