DPST: Triple-Leveraged ETF Trade Call Amid Bank Stress
"The third thing that I said was I got an alert from DPST. I had made this public. I said, "Hey, DPST because of the regional bank issues last week. We've seen this before. This was last year, the year before when Silicon Valley Bank went bust and you saw a huge surge in DPST off of that drop. This one went from $80 to $650 during that run. It was super simple. Again, a triple leveraged ETF. And you can see the alert right there is the buy in the 4hour algorithm.""
The speaker highlights a trade alert for DPST, a triple-leveraged ETF, triggered by regional bank issues reminiscent of the Silicon Valley Bank episode. He recalls historical moves from $80 to $650 and indicates that the 4hour algorithm has signaled a buy, suggesting a tactical trading opportunity based on prior momentum during banking stress.
Regional Banks Under Pressure
"Zeon's bank sank 14% after it disclosed 50 million charge off for a loan underwritten by its own subsidiary. And then Western Alliance Bankorp fell almost 11% after it said it made loans to the same borrowers. Of course, there are growing concerns about credit. The disclosures add to other recent loan blowups, and now the fact that small regional banks are seeing some impact is raising more questions."
The speakers highlight heavy losses at two regional banks, with Zeon's bank and Western Alliance Bankorp both experiencing significant percentage drops. They attribute these declines to problematic loan disclosures and overall emerging credit concerns, suggesting potential immediate risks in the regional banking sector.
Nordea Bank Shows Strength with Share Buyback and Earnings Beat
"So Nordia is actually the first big European bank to report in the earning season and it looks quite positive. It launched a 00250 million euro buyback. Net interest income also beat expectations because the CEO said that Nordic companies had a renewed appetite for investments, which translated into increased demand for lending. This performance is reassuring for Nordia and could bode well for the rest of the European banking sector."
The speaker notes Nordea Bank's positive earnings report, highlighted by a 00250 million euro share buyback and stronger-than-expected net interest income driven by renewed corporate investment demand, suggesting a bullish outlook for the bank and potentially the broader European banking sector.
Commentary: Opportunity in Regional & Mid-Sized Banks
"I'm going to go to regional and mid-sized banks. Right now, the super regionals, companies like Truist, PNC, Regions, U.S. Bancorp, are all trading at less than 1.5 times their book value. They are paying a dividend of more than 3% too. Truist is up near 5%."
The speaker discusses the undervalued nature of regional and mid-sized banks, highlighting attractive price-to-book ratios and dividend yields, with a specific callout for Truist as an example of potential value.
Trade DPST for Short-Term Regional Banking Opportunity
"The DUT trade from yesterday was DPST, a triple leveraged ETF on regional banks, which was up 8%. This is a decaying asset meant for trading rather than holding."
The speaker highlights a short-term trade opportunity in DPST, a triple leveraged ETF focused on regional banks. He advises that due to its daily fee decay, it should be traded actively rather than held long-term.