What a roller coaster ride of the US banking industry! The BMO US bank covered call ETF ZWK dropped by more than 4% in the morning today. The transaction volume was 6 times of the recent lows. Wow! Some investors are dumping it.
Time to buy the dip? Fortunate favors the brave? LOL! Some people might wait it to drop more to buy while some don’t want to touch it for a while.
This ETF ZWK dropped to around half of its peak price in October 2021 and near the lowest point in March 2020 caused by pandemic. Banks are so essential for any economy. The US government will do whatever necessary to secure it. If someone has long investing horizon, it might be an opportunity to buy.
Some fear that there will be more regulations and tighten the supervision of the banks. This can limit the growth and earnings. However, look at the US congress now. The house is swayed by a few extreme right wingers. Not sure anything can happen. Even if there is any executive action by the White House, is it really a bad thing? Is it actually better for the long-term health and stability of the US banking industry?
The congress and the Biden administration is deadlock on the debt ceiling fight. In June, the treasury is going to run out of money to pay the bills. No idea how this is going to play out. If it causes uncertainty or scare on the minds of investors, there might be opportunities to buy the dip? The social security payments, veteran’s payments and etc. will be impacted. That is very sad given the high inflation impacting the most vulnerable.
Let’s pray that there is no catastrophe.