Tech tanks but banks pass the stress test — rotate into JPMorgan
While tech stocks have been dragging the market down, big banks just aced their annual health check by the Federal Reserve. This gives mega-banks like JPMorgan the green light to pump tens of billions of dollars into buying back their own stock.
Idea
The broader market is currently being dragged down by a tech sell-off, but the financial sector is quietly setting up for a major breakout. Bloomberg reports that all big banks passed the Fed's stress test with flying colors, which immediately triggered a massive $50 billion buyback from JPMorgan and dividend hikes from Goldman Sachs. When companies buy back their own stock at this scale, it provides a massive floor under their share prices. With money flowing out of volatile tech stocks, this combination of Fed-approved safety and huge cash payouts makes the banking sector the perfect safe-haven trade.