Reflation Trade and the Yield Curve - A Few Stocks on my Watchlist

I am continually getting companies in the financial sector as potential buys from the our model. I'm not adding to the portfolio at this time as I'm waiting for the market to give me a clearer picture. The financial sector hasn't been trading right for a while. We own a few banking stocks and will keep our stops tight. We are not encouraged by the flattening yield curve. This is a bad sign for the banking sector and the economy. It would appear the euphoric "Trump Rally" is being tested as many are wondering if Trump will tame the Washington beast.

We are still getting buy signals from the reflation trade and steel companies continue to enter our screens. We're not moving aggressively and waiting for better market signals. Copper took it on the chin yesterday and the Gold/Copper ratio is heading higher. These are not good for those that adhere to the reflation trade expectations. We're not saying the reflation trade is over...probably pausing...but we're still waiting for further evidence.

A few stocks that I am watching.

Joseph S. Kalinowski, CFA