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Description: Financial stocks were the highest performing sector in the S&P 500 in May, as the month comes to a close.  The Financial Select Sector SPDR Fund  XLF -0.20% , which tracks financial stocks in the S&P 500, was up 7.5% for the month, compared to half that in the broader market in the same period. In contrast, the U.S. Treasury bond yield curve has  have steepened, which analysts say is a good sign for bank profits.

Source: Marketwatch.com

Date: May 31, 2013

Link: http://blogs.marketwatch.com/thetell/2013/05/31/report-nothing-bankers-like-more-than-a-steepening-yield-curve/

Questions for Discussions:

  • What does the report argue is the relationship between financial stocks and the yield curve?
  • Does this make sense to you as well?
  • What can cause the predicted scenario to fall apart?

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