The global frenzy for yield continues this morning as Mario Draghi made dovish comments suggesting more easing measures likely to come from the ECB in response to recent weakness in the economic headlines. US Treasuries are rallying again this morning, sending the yield on the 10-year to 2.38% and pushing the yield curve further into inverted territory at negative 6 basis points on the 10y/3m curve. In corporate news, Southwest Airlines (LUV) lowered guidance citing the grounding of the 737 MAX and adverse weather conditions. On a more positive note, both KB Homes (KBH) and Lennar (LEN) are trading up over 2.5% after reporting earnings.

The chart below is from the second page of our Morning Lineup and shows where S&P 500 sectors are trading with respect to their trading ranges. For each sector, the circle represents where it is now, while the tail indicates where the sector was trading a week ago. In the chart, light red or green shading represents overbought or oversold readings (>1 standard deviation above or below 50-DMA), while dark red and dark green shading indicate extreme overbought or oversold readings (>2 standard deviations above or below 50-DMA).

Looking at the chart, can you tell which one isn’t like the others? While the S&P 500 and most sectors remain at short-term overbought levels, Financials have been hit hard and is not only the only sector trading below its 50-DMA, but it is also the only oversold sector. Keep in mind also, that this reading comes after yesterday’s rally where the sector handily outperformed the S&P 500 gaining over 1%. If there is one sector where the pain of an inverted yield curve was immediately felt, it was in the Financials!