Financials Advance as Broad Participation and Heavyweights Lead

The Financials sector finished +0.7% on Friday, September 11, supported by broad participation across the industry as 74.3% of its stocks advanced. Cap-weighted performance ran ahead of the +0.5% equal-weighted mark, signaling that the sector's larger companies contributed more to the day's advance than smaller peers. The move came as wider market sentiment improved after crude oil prices eased. At the same time, August consumer price inflation held at 3.4% year over year, meeting expectations. That report helped foster gains across major U.S. stock indexes.

Gains across the sector were paced by payment processing and alternative asset management names, led by Fiserv, Inc. (+5.4%) and Blackstone Group Inc (+2.5%). Our sources show no company-specific catalyst reported for Fiserv, Inc. (+5.4%) on Friday, September 11, indicating that its gain aligned with the broad macro-driven rebound across equity markets. On the downside, Cboe Global Markets Inc (-2.1%) was the sector's primary laggard. In regional banking, Citizens Financial Group received a credit rating upgrade on improving profitability.

For investors tracking the sector, the Financial Select Sector SPDR Fund, an exchange-traded fund that trades under the ticker XLF, closed +0.6% at $57.23. EasyAlpha grades the stocks in the sector against their industry peers, and 66.2% of the fund's graded weight sits in companies with an A or B grade. Companies graded A or B have stronger fundamentals, and historically they have carried a lower risk of large drawdowns than companies graded D or E.

The single-session advance fits into a broader medium-term recovery. The fund has delivered +9.4% over the past one hundred trading sessions, +17.1% over the past six months, and +5.9% over the past twelve months, even as it sits at -1.2% over the past month.